Small business finance scheme
In his Pre Budget Report last year Mr Darling announced a number of new initiatives to provide funding for small businesses including:
- early in 2009, the Government will launch a Small Business Finance Scheme - a new temporary guarantee scheme to enable up to £1 billion of new Government supported lending by banks;
- the Export Credits Guarantee Department, in conjunction with the banks, will introduce a temporary guarantee scheme to support a £1 billion facility providing smaller exporters with better access to short-term working capital;
- the Government will also make available a capital fund of £50 million providing equity or quasi-equity to SMEs who are over leveraged;
- earlier in November 2008, Advantage West Midlands launched a transition fund for viable SMEs facing financial difficulties. Other Regional Development Agencies will launch similar loan funds, now totalling £25 million, to help businesses over the next six months.
- early in 2009, the Government will launch, with Business Link, a new easily accessible portal, to direct credit-worthy SMEs who are experiencing problems accessing credit.
In this article we would like to update you on the first initiative; the small business finance scheme.
Although the new scheme has similarities with the present Small Firm Loan Guarantee Scheme (SFLGS), there may be differences. Certainly the new scheme offers qualifying small businesses with bank funding underwritten by the Government and the banks. So far so good. Unfortunately it is still not clear which businesses will qualify and what the 'red tape' aspects are! Let's hope its easier to apply for this new facility than the existing SFLGS.
The Government is apparently keen to launch the initiative either this month or February 2009. As soon as announcements are made we will include them in future newsletters.