Small businesses grab £20 billion lifeline

Owner-managers are welcoming a government plan to underwrite up to £20 billion for businesses.


Owner-managers are welcoming a government plan to underwrite up to £20 billion for businesses.

Owner-managers are welcoming a government plan to underwrite up to £20 billion for businesses.

Tim Wallis, owner of IT company Content and Code, says: ‘This is a really good idea as we need to get the banks lending again. It’s a trade, not aid, solution and so exactly the right measure for the economy.

‘We have had to pay too much attention to our cashflow over the last few months. Having access to loans will enable us to continue our rapid expansion.’

Julie Simpson, managing director of Resource IT, says: ‘This is really good news for us as it means we are no longer precluded from applying for a small business loan.’

Key to the plan is the £10 billion working capital scheme, whereby the government will provide guarantees on 50 per cent of £20 billion short-term loans to businesses with a turnover of up to £500 million.

Other measures announced include a £1.3 billion fund specifically for small businesses and a capital for enterprise fund worth £75 million for SMEs in need of long-term funds.

David Frost, director general of the British Chambers of Commerce (BCC), says: ‘[The] government promise to guarantee individual loans to businesses is not only sensible, it’s crucial.’

Alan Tomlinson, partner at insolvency practitioners Tomlinsons, is sceptical: ‘Anything that can get money moving again has to be seen as a positive, although we shouldn’t get carried away.

‘How long will it take for this latest scheme to filter through – for many companies probably too long – and will it really get the banks lending again? There’s a big difference between theory and practice.’

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