The rate charge will affect about 5,800 loans that already exist that were drawn up for companies and an additional 3,000 loans that were previously approved by the Business Department.

The news follows revelations that were published in The Daily Telegraph that banks have been able to get about £6m in fees by making SMEs pay inflated rates in order to get access to the scheme which is valued at £1.3b

Research discovered that the companies that chose to drawn down their loan agreements were forced to pay about 1.8p% of the loan in administration fees and also accept an increased rate of interest set at 6.75%.

In response SME groups called for the mater to be investigated with FSB, member Stephen Alambritis commenting that the scheme should be the cheapest option for businesses and that the government needs to investigate the charges.

The new increase in the premium will add an increased cost to obtaining a loan for a businesses, which has been extended up until 2011 with £500m set aside for guarantees.

A spokesman for the Department of Business stated that the discounted premium was only temporary, and could only be offered during the time period when it was still uncertain about how much it would cost for SMEs to get financing.  According to the spokesman the government always planned to return the premium back up from January of 2010.

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A poll conducted by Clifton Asset Management showed that out of the 1,000 SMEs polled; only about 37% of the managers had heard of the EFG. Of the 63% of managers who had heard about the effort, 89% stated that it would not help them to apply for help.

The new figures from the study were announced directly after Alistair Darling the Chancellor stated that the scheme worth £1.3b would be extended to help stimulate lending by banks for loans that are under £1m.  It has been extended past its March 2010 by six months.

The Treasury stated that the scheme was an important funding source for businesses after the bailout of the banking industry.

Director at CAM, Anthony Carty, stated that their figures show that in just a quarter the amount of SME managers who knew about the scheme reduced by a 5% margin.

On the other hand, Business Secretary Lord Mandelson told the House of Lords that so far the EFG has been able to secure 6,855 SMEs with loans that amount to about £692m.

Carty stated that while the figures are encouraging, the study shows that the scheme is still not as effective as the Government claims.

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