In the Pre-Budget Report on 24 November 2008, my right honourable friend the Chancellor of the Exchequer announced a package of Government support for small and medium-sized businesses to help them through the current economic difficulties.
Since then the Government have been working alongside the banks, business organisations and financial organisations to ensure that we speedily transform this announcement into real help for business.
I am pleased to announce that as part of the Government’s “Real Help” campaign, businesses can now access the full range of support, providing up to £21 billion worth of real help to business.
The real help with finance package will provide:
up to £1.3 billion of additional lending to smaller businesses through the enterprise finance guarantee. This 75 per cent guarantee will support bank lending to businesses of less than £25 million turnover which are otherwise credit-worthy but are facing problems in accessing working capital because of economic conditions;
up to £10 billion working capital guarantee, which by guaranteeing up to 50 per cent of a portfolio of loans will support bank lending of up to £20 billion. Banks have been invited to submit their portfolios of loans for approval. The first £1 billion guarantee tranche should be operational by 1 March, supporting around £2 billion of loans. Use of this facility will of course be subject to final terms guaranteeing value for money; and
a £75 million capital for enterprise fund, made up of £50 million of government funds and £25 million from Barclays, HSBC, Lloyds TSB and RBS. The fund will provide long-term capital to businesses which have exhausted traditional forms of finance.
Information on these schemes and initial diagnosis of eligibility is available at www.businesslink.gov.uk/realhelp/finance.