Darling
announces £4bn boost for business
An extra £4 billion worth of finance is to
be made available to the
Last week Alistair Darling confirmed that high street banks will be able to use the additional funding, provided by the European Investment Bank (EIB), to increase their lending to small firms.
Since the beginning of the credit crunch banks have restricted their lending to SMEs, leaving many businesses struggling to cope during the current economic slowdown.
Yet it is in the interest of banks to
support customers in both the bad and good times, Darling argued. He claimed
that SMEs are the ‘lifeblood’ of
The Chancellor also called on the banks to maintain competitive lending rates. ‘We are not advocating irresponsible lending, but a clear commitment to ensure that funds are there for creditworthy firms who are seeking finance from our high street banks.’
Business groups have welcomed the support package. ‘Small and medium sized businesses will be pleased with this extra support as there is clearly a demand for a better flow of finance,’ commented David Frost, Director General of the British Chambers of Commerce.
However John Wright, Chairman of the Federation of Small Businesses, urged both the Government and the EIB to do more to promote the availability of the additional funding. ‘We need to be assured that this money will actually filter down to small businesses,’ he said.