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Ceca slams Mandelson SME finance scheme

The Civil Engineering Contractors Association has said the Government’s scheme to enable banks to restore lending to businesses is too complicated and will take two months to have an impact.

Lord Mandelson unveiled a plan yesterday to support lending to SMEs, but the body feels the scheme may not be enough.

The centrepiece of the scheme is a £10 billion pledge to guarantee 50 per cent of loans for small businesses.

Ceca director Rosemary Beales said: “We are pleased that this scheme has been announced, but SMEs need real support delivered without unnecessary paperwork and delay. What the Government has offered is a complicated system that could take up to two months to get cash to hard-pressed companies who need working capital now.

“This help should have come sooner and been more straightforward. We need to see how this will work in practice and will ask the Government to act quickly to solve any delivery problems.

“We have seen an unprecedented number of smaller civil engineering contractors reporting cash flow problems in the past six months. Lack of credit and lack of new workload opportunities presents a threat to the capacity of the Civils Sector. Last year we forecast up 9,000 of the SME workforce could be made redundant by the end of March 2009 unless steps were taken to relieve the pressure.

“CECA met several MPs before Christmas and pushed for support to be made available as soon as possible.”

Further Reading:

CBI council: Govt should act on trade credit insurance

Read about the finance available at DBERR's website