£250m AVAILABLE FOR SMEs FROM GOVERNMENT FOUNDED BRITISH BUSINESS BANK

The government has pledged to help small and medium-sized firms benefit from the economic recovery and made an additional £250m available through its new Sheffield based British Business Bank.

The investment from the bank, to be backed by government guarantees, has been announced by Deputy Prime Minister Nick Clegg and the Business Secretary Vine Cable who have promised to do “all we can” to help firms.

The British Business Bank is in the process of being set up by the Department for Business, Innovation and Skills – BIS – and says it expects to generate more than £500m in new lending and investment for the UK’s smaller businesses each year.

Mr Clegg has explained that British Business Bank will be able to leverage the capital and use government guarantees to lend much higher sums and said:

“Small businesses are working hard to fuel our recovery and help us build a stronger economy.

“I am determined that we do all we can to help companies that have struggled to get the investment they need – investment that means they can employ those extra people, take on that new order, and buy new equipment.”

Mr Clegg continued:

“The British Business Bank will give smaller companies who have struggled to get loans in the past easier access to millions of pounds of cash to grow and create more jobs.”

The British Business Bank was formally launched in October and now has £1.25bn of capital for new programmes to support small companies. It will become fully operational in autumn 2014, once EC State Aid approval has been cleared.

Last week, The Bank of England announced significant changes to the Funding for Lending Scheme stating that it would no longer be aimed at householders but would be focusing instead on business lending from January.