The funding, which will distributed by RBS, NatWest and HSBC, is aimed at SMEs considering investing in new capital assets, such as plant and machinery, and is expected to create at least 4,000 jobs.
“I’ve lost count of the number of times people working in our small businesses have told me they just can’t get a loan for that new investment, that new clean room or that extension to their business,” says PM David Cameron.
“We also need to be supporting the person who wants to start that small internet trading firm from their home. The plumber who sees the chance to start a business fitting green energy to people’s homes. The people out there who are brave enough to make a break and go for it.
“Often it’s a small investment maybe just £30,000 that can get those businesses going, create the jobs, kickstart the innovation and exports that we need. But these are the very loans that you simply can’t get without personal guarantees, like putting up your house – and even then the banks might say no.
“That’s got to change and we re going to use the Regional Growth Fund to help change it.
“Through this ground-breaking deal with the banks, we’ll provide ?95m of new Regional Growth Fund money for SMEs. It’s a huge step forwards.”
To qualify for the NatWest and RBS scheme, SMEs need a turnover of less than £25m. For the HSBC scheme, they’ll need a turnover of less than £50m. The banks won’t earn any fees to administer the scheme and interest earned on any funds held on the bank’s balance sheet must be used for beneficiary grants or returned to the government.