A scheme designed to overcome the problem facing a new, small firm that has a sound business plan but lacks assets to provide security for a bank loan. The government does not provide the loan but, instead, guarantees that the bulk of the loan will be repaid. The guarantee will reduce the reluctance of a bank, or other financial institution, to grant a loan to a new and, so far, relatively untested business. Guarantees are given on loans up to £250,000 with a term of up to 10 years, made to qualifying UK firms with an annual turnover of up to £5.6 million. BERR guarantee covers 75% of the loan but, in return, charges a premium of 2% on the outstanding balance of the loan.