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Small Businesses: Credit

Volume 487: debated on Thursday 5 February 2009

13. To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform what recent representations he has received from small businesses on their access to credit. (254320)

My noble Friend the Secretary of State for Business, Enterprise and Regulatory Reform, Ministers and officials are in regular contact with small business representative organisations and with small businesses themselves on many issues, including access to credit.

To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform what steps his Department is taking to assist small businesses in obtaining credit. (254316)

The Government recognise that the unprecedented combination of credit crunch and global economic downturn means that economically viable businesses may be struggling to receive funding for working capital, trade finance and investment. Against these continuing global economic challenges and uncertainties our priorities have been to stabilise the banking system, to stimulate the economy, and to ensure we get lending going again.

Alongside these measures my RHF the Chancellor has announced a package of measures designed to assist businesses obtain credit including:

£10 billion working capital scheme, securing up to £20 billion of short-term bank lending to companies seeking loans of £1,000 to £1 million with a turnover of up to £500 million.

A £1 billion enterprise finance guarantee scheme (EFG), securing up to £1.3 billion of additional bank loans to small firms with a turnover of up to £25 million.

A £75 million capital for enterprise fund (CEF) (£50 million from Government augmented by £25 million from the banks) to invest in small businesses with viable business models that have exhausted traditional forms of finance.

BERR continue to work very closely with the main lenders—through the Small Business Finance Forum—to ensure that viable businesses are given access to the credit they need. I would like to draw the House's attention to a commitment by RBS today to ensure that their branches are lending to small businesses.