Mandelson has announced a comprehensive package to help SMEs secure finance. He says: We know that some companies are struggling to secure the finance they need, not because of any failure in their business but due to the tougher credit conditions. That is why we have designed a package of measures addressing different forms of credit and providing real help for businesses.”
The package consists of loan guarantees and a new enterprise fund worth £75m that will be used to invest in small businesses that need equity. The banks will contribute £25m to that fund.
The other measures are a £10bn working capital scheme that will secure up to £20bn of short term bank lending to companies with a turnover of up to £500m, and an enterprise finance guarantee scheme that will secure up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m.
Mandelson also confirmed that discussions are underway with trade credit insurance providers about a potential scheme to help companies affected by reductions in their credit insurance.
In addition, the government is launching a new web portal to help businesses identify their financial needs.
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