Since its inception in the May of 2010, the Enterprise Finance Guarantee scheme has added more than 6,500 jobs in the UK, with many going to contractors.
At least, that’s what the Department for Business, Innovation, and Skills says in their most recently released figures. Small businesses received around £1.1 billion under the scheme, which provides funding to small firms that would otherwise not be able to secure the funds to invest in their businesses and exhibit growth. In addition to the 6,500 jobs added over the years, BIS says that small businesses that benefited from the scheme were able to preserve an additional 12,375 job positions that otherwise would have been eliminated by rising overhead costs.
BIS says that the scheme has been incredibly successful, as their report has found that for every £1 spent has led to more than £33 in growing the economy. Michael Fallon, business minister, was beside himself with the news, remarking that he’d love to see even more banks making use of EFG loans.
Increasing the number of banks that offer EFG-backed loans would absolutely benefit not just small businesses in need of capital but has an excellent knock-on effect across the economy, just as BIS hoped it would. Many of the jobs either added or preserved by the programme are doubtlessly being filled by umbrella company contractors or freelancers, considering how cost effective using interim workers can be in comparison to permanent ones since employers have fewer tax and business insurance liabilities in comparison to a PAYE employee.
Meanwhile, the flexibility of keeping a freelancer on for just a few months or until the end of a specific project is also an excellent way to make savings in the current economy. Many employers have been more than happy to take on a contractor or two for a specific period of time in order to keep costs low while still remaining productive, and as freelancer workers are accustomed to this nomadic employment lifestyle, there’s little in the way of blowback at the conclusion of a project.
If you ask me, it’s a match made in heaven, as the EFG scheme provides much-needed finance to companies looking to expand and these same companies can make every last penny stretch as far as possible by using contract workers to conduct everyday business.
