The Government has launched various finance schemes in the last couple of years aiming to tackle the ongoing difficulties small businesses face when accessing finance. Last month, it announced a new £1 billion Government-backed business bank to bring together the raft of existing finance schemes, create a single port of call for information and advice, ‘shake-up the market’ and boost lending to small businesses, in a move that it hopes could attract up to £10 billion extra lending capital from private sector investors.
Although the scale and timing of the plans are still under discussion, the Government has indicated that the new bank will operate through existing lenders and facilitate long-term lending, possibly loans and other long-term finance with a maturity of up to ten years. High growth companies such as manufacturers and exporters will be the bank’s main targets and it aims to be open for business within the next 18 months.
Although business groups have welcomed the plans, they have also speculated that the new bank will only replace schemes such as the Funding for Lending Scheme, Enterprise Capital Funds and the Enterprise Finance Guarantee scheme, and offer nothing new. Others were keen to highlight that a rebranding would not be enough to help Britain’s struggling SMEs and that increased backing would be needed.
Full details are expected to be unveiled at the Autumn Statement which has now been confirmed to take place on 5 December 2012.
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