The guarantee scheme is part of Economic Development’s Enterprise and Business Strategy, which was launched today.
It is based on a scheme which has been operating in the UK for some time and is designed specifically for entrepreneurs and small businesses which find it difficult to raise financing, either because they do not yet have a proven track record or substantial assets to back their loan request.
Under the new scheme the States are offering to act as guarantor for up to 75% of a business loan, for loans between £5,000 and £250,000.
The loan must be repaid within two to ten years.
In recompense the borrower will pay the States a two per cent premium on the value of the outstanding loan.