Tied pubs eligible for government aid

Tied licensees can now apply for government support under a scheme to help small businesses struggling for financial help, licensing minister Gerry Sutcliffe announced today.

And tied pubs are now "much more likely to have loans agreed" by banks because they are guaranteed by the government, the Department for Culture, Media and Sport said.

The government unveiled its Enterprise Finance Guarantee (EFG) scheme​ in January to help firms finding it difficult to secure a loan. Businesses are able to borrow between £1,000 and £1m.

Freeholders were already eligible for the scheme, but Sutcliffe has confirmed that tied tenants and lessees can now also apply for government support.

A spokesman for the Department for Culture, Media and Sport said Sutcliffe was "well aware of the difficulties facing pubs and is keen that those with a viable business should be allowed to prosper".

He added: "He (Sutcliffe) has been keen to widen support offered by the EFG scheme to include the pub sector, and has been in discussions with ministerial colleagues at BERR (the department Business, Enterprise & Regulatory Reform) about extending the scheme for tied pubs."

The EFG scheme is designed to help smaller, credit-worthy companies which might be denied to access to working capital or investment finance due to the current tight lending conditions.

Rumours have surfaced in recent weeks that small businesses are struggling to get hold of credit from banks in the current economic climate.

The government scheme covers the following types of lending:

• new term loans (with terms of between one and 10 years)

• existing lending where lenders might not otherwise refinance the debt

• conversion of part or all of an existing utilised overdraft into a term loan in order to release capacity in the overdraft to meet working capital requirements (conditional on the lender being prepared to continue to provide an overdraft and the serviceability of both the term loan and the overdraft).