Banks ‘abused’ loan guarantee for firms

The SFO is looking into high street banks’ use of the Enterprise Finance Guarantee
The SFO is looking into high street banks’ use of the Enterprise Finance Guarantee

The Serious Fraud Office is examining allegations that government schemes designed to increase lending to small businesses have been abused by high street banks.

A claim that government-funded guarantees have been wrongfully secured in order to remove companies’ overdrafts and pass risky SME loans on to the taxpayer is understood to be one of a range of issues being looked at by the SFO.

The agency is scrutinising banks’ use of the Enterprise Finance Guarantee, and its predecessor, the Small Firms Loan Guarantee Scheme, as part of a wider analysis of lenders’ treatment of small business customers.

The SFO has yet to announce whether it will launch a full-scale formal investigation, although it is understood to be considering issues related to the way in which