Government unveils £20bn loan scheme for business
Earlier today Business Secretary Lord Mandelson announced that the Working Capital Scheme will guarantee up to £20bn of short term bank lending to companies that have a turnover of up to £500m.
The move comes as thousands of businesses are battling to stay afloat because banks are restricting access to credit to protect their capital.
The rescue package also includes an Enterprise Finance Guarantee Scheme, securing up to £1.3bn of additional bank loans to firms with a turnover of up to £25m.
Furthermore, a £75m Capital for Enterprise Fund – financed by both the state and the banks – will be set up to invest in viable small businesses which need equity.
Lord Mandelson said the measures would target ‘genuine business needs’.
Commenting on the emergency package, David Frost, Director-General of the British Chambers of Commerce, said: ‘Businesses are critically in need of cash-flow. Any move to get banks lending again will be seen as good news at this bleak time.
‘A Government promise to guarantee individual loans to businesses is not only sensible, it’s crucial.’
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Date: 14-01-2009