Government pledges additional £250m to help British businesses
The government has pledged an extra £250million to the British Business Bank to help small and medium-sized companies contribute further to the economic recovery.
Deputy Prime Minister Nick Clegg believes the funding will allow for more investment and for companies to take on more staff, therefore cutting unemployment rates.
The latest money comes on top of £1bn of funding last year. The bank will be based in Sheffield.
It is in the process of being set up by the Department for Business, Innovation and Skills and it is expected that more than £500m in new lending and investment will be generated each year.
Ahead of Chancellor George Osborne’s Autumn Statement, when a curbing of business rates is widely anticipated, the latest news is a positive sign for the sector.
Mr. Clegg said he believes the British Business Bank will be able to leverage the capital and use government guarantees to lend much higher sums to SMEs.
Building towards a ‘stronger economy’
“Small businesses are working hard to fuel our recovery and help us build a stronger economy,” he explained.
“I am determined that we do all we can to help companies that have struggled to get the investment they need - investment that means they can employ those extra people, take on that new order, and buy new equipment.”
The news also comes at a time when the Bank of England is restructuring the Funding for Lending Scheme to focus more on business lending from the start of 2014.
This will be welcome news to many businesses who have struggled financially as a result of the recession in recent times, with the number of companies requiring insolvency practitioners on the increase.
Those going into administration are growing in number, while some SMEs are turning to corporate restructuring methods in order to keep trading.
Finance to any companies in this sector is sure to provide a financial footing that will enable many SMEs to have a leading role in driving the economic recovery.
By Phil Smith