Small and medium-sized businesses could benefit from a new package of measures designed to ‘address the cash flow, credit and investment needs of businesses’ by securing bank lending in order to reduce perceived risk.

The measures were announced by the secretary of state for Business, Enterprise and Regulatory Reform (BERR), Peter Mandelson.

The Government’s measures include:

• A £10bn Working Capital Scheme, securing up to £20bn of short-term bank lending to companies with a turnover of up to £500m.

• An Enterprise Finance Guarantee Scheme, securing up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m.

• A £75m Capital for Enterprise Fund (£50m from Government augmented by £25m from the banks) to invest in small businesses which need equity.

Lord Mandelson said: "UK companies are the lifeblood of the economy and it is crucial that Government acts now to provide real help to support them through the downturn and see them emerge stronger on the other side.

"We know that some companies are struggling to secure the finance they need, not because of any failure in their business but due to the tougher credit conditions. That is why we have designed a package of measures addressing different forms of credit and providing real help for businesses."

Source

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