Support to SMEs in the UK Essay Example | Topics and Well Written Essays - 1750 words

Support to SMEs in the UK - Essay Example This importance of the sector can therefore not be overlooked. Moreover, with the increased shift towards government and private sector alliances in most nations, it is impediment upon the government of the day to closely monitor and support the activities of the small businesses in the country. It is through the recognition of this fact that the government has the obligation of providing support to the various SMEs in the country. Another important factor about SMEs is through the characteristic growth that they have exhibited in major economies of the world including the United Kingdom. To harness this growth to the national economic growth, there is a need for a good operational environment for such enterprises. The government, private sector and other parties have therefore taken measures to ensure that the businesses are supported for an enhanced growth that will translate into an economic improvement. This paper will critically analyze the support and resources that have been a vailed to the SMEs in the country in terms of linguistic and cultural support. ... First, there are two major national wide financial assistance programs. They include the enterprise finance guarantee (EFG) and the enterprise capital funds (ECF). Secondly, there are other separate programs that are concerned with supporting the enterprises within England, Scotland, Ireland and Wales (BBC, 2011). The EFG is a nationwide financial assistance program to SMEs that was established to encourage and enhance lending to the various enterprises from the various commercial banks. Since lending tradition in the country has always followed strict requirement criteria, the government has been able to use this program to assist the enterprises meet these standards. This is through providing a guarantee of 75% to their loans on commercial banks. The enterprises also need to show that they have an annual income or turnover of about 25 million pounds (BBC, 2011). This program is flexible to all enterprises except in the coal industry. The EFG program is therefore a resourceful finan cial guarantee program that helps enterprises overcome the cultural barriers imposed by commercial banks that traditionally prefer to deal with established organizations because of the strict requirements of lending in the country. Through this program, the enterprises are able to acquire loans, repay their existing loans among other financial undertakings for the support of business growth and expansion. As a result, it is estimated that about 6000 enterprises benefit from this resourceful program annually in the country with enterprises required to access the program through their banks. Likewise, the ECFs are another move by the national government aimed at supporting the growth of SMEs. The program is a capital oriented initiative that involves