The chancellor George Osborne announced today in his Autumn Statement measures to help small and medium sized businesses gain access to credit and finance.
The first measure he mentioned was the extension of the previous government’s Enterprise finance scheme to include businesses of up to £44 million. “But the enterprise scheme is not enough on its own and never will be,” he said.
He outlined a major programme of credit easing for SMEs, with a ceiling of £40 billion. “We will also reduce the Asset Purchase Facility by £40 billion. Only a small proportion of the facility was ever used,” he said.
The government is also launching a national loan guarantee scheme. “It will work on the simple principle that we use the hard-won, low interest rates that the government can borrow at to reduce the interest rates that small businesses can borrow at,” said Mr Osborne. The new loans and overdrafts will be available to businesses of under £50 million and Mr Osborne estimates this will result in a 1 per cent reduction in interest rates for these small businesses.
“The important thing is to get credit flowing to Britain’s small businesses,” he said.