Darling to ‘broaden sources of finance’ for businesses

More medium-sized firms could soon gain access to capital markets as part of new plans being developed by the Treasury.

Chancellor Alistair Darling has announced his intention to ‘broaden the sources of finance’ available to companies and reduce the ‘dominance’ of the main high street lenders.

However, the measures are not expected to be extended to small businesses, which officials say should already be benefiting from commitments on bank lending.

Writing in a national newspaper, Darling said: ‘If there is one lesson to be learnt from this crisis, it is that credit must never be allowed to dry up because of reliance on a small number of banks.

‘In the same way that big companies can access funding directly from capital markets, by issuing bonds or commercial paper, I want to start creating a different financial model in the future, in which small companies get funding from sources other than banks.’

The plans are expected to be finalised in time for the Pre-Budget Report this Autumn.