The SFLGS is where the DTI guarantees loans from banks for small firms (up to £5m turnover for manufacturing businesses, £3m turnover for other businesses) that have viable business propositions, but fail to get conventional loans because of a lack of security.
Loans are available for up to £100,000 (£250,000 if the business has traded for more than 2 years) and are repayable within 10 years.
SFLGS guarantees the lender 75% of the loan, in return the borrower pays the DTI a premium of 2% a year on the outstanding loan balance. The commercial aspects of the loan are matters between the borrower and the lender.
The SFLGS can only apply where additional finance is being provided to the business, it cannot be used to buy shares or replace existing finance. Borrowers must pledge all available assets for the scheme to apply, (this includes the equity in the marital home if your partner allows it to be pledged)
Many business activities are eligible, but as you would expect, there are a number of exclusions.
Full details of the scheme can be found in the SFLGS booklet (pdf, 156kb on the DTI website
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