A small firms loan guarantee scheme is also known as SFLGS. Different lending agencies offer loans under this scheme. These loans come with a government guarantee. It is meant for individuals or business firms who, due to lack of security or a good track record, face problems in loan availability.
More on Small Firms Loan Guarantee Scheme
The small firms loan guarantee scheme comes with government guarantee. It is a boon for the small to medium scale business enterprises.
Individual entities also stand to gain from this scheme. The small firms loan guarantee scheme seeks to open up the bottleneck of fund supply for those economic agents who find it difficult to garner finances from the conventional means. They usually do not possess the assets demanded by conventional lending agencies as collaterals or securities.
The unique feature of small firms loan guarantee scheme(SFLGS) is that the government chips in as a guarantor for the borrower in case of a probable default.
It is sort of a protection extended to economic agents with small means. Different certified lending agencies with minor variations in criteria offer loans under small firms loan guarantee scheme to clients.
Some Characteristics of Small Firms Loan Guarantee Scheme
Applicants of the small firms loan guarantee scheme (SFLGS) need to put in a viable business plan in front of the lenders. The potential lender needs to be assured about the viability of the borrowers project as it is interlinked with the efficacy of the loan. The funding available under the small firms loan guarantee scheme needs to follow a tailor made path. They are formulated to cater to the specific needs of the client.
Certified lenders offering the SFLGS usually offer counsellings to clients on the product details and other related services. Borrowers under the small firms loan guarantee scheme need to update their lenders on various business records. They include items like the following:
date of initiation of the business
history of borrowing
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