A new government initiative designed to increase the supply of credit to the UK's smaller businesses from banks has been launched today (20 March).
The National Loan Guarantee Scheme (NLGS) has been created by the Conservative-Liberal Democrat alliance specifically with the intention of helping such companies access the funding they need to grow and prosper in the wake of the recession.
Last week, it was widely reported that the programme - for which all British firms with an annual group turnover below £50 million ($79 million) will be eligible - would be given EU approval imminently.
And this permission has now been granted, meaning the NLGS - which will involve up to £20 billion worth of guarantees on unsecured lending from financiers - can go ahead.
The initiative will see businesses benefit from a one percentage point discount in their loans and chancellor George Osborne commented: "The banks retain the credit risk and therefore their usual lending and credit parameters will apply."
By Asim Shah