Business secretary Peter Mandelson has announced a £20bn loan insurance package for the UK’s small and medium-sized businesses, suffering from lack of available finance due to the credit crunch.
The key elements of the plan are:
1) A £10bn working capital scheme, securing up to £20bn of short-term bank lending to companies with a turnover of up to £500m.
2) An enterprise finance guarantee scheme, securing up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m.
3) A capital for enterprise fund worth £75m, made up of £50m from the government and the rest from banks and available for small firms which urgently needed equity.
Following the bank rescue package, VAT cuts and massive political pressure on the banks to release credit, the Federation of Small Businesses has called Mandelson’s package "the last throw of the dice".
Full information is expected on the Business Link website soon.
More reaction and detail will follow here through the day. Stay tuned…
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