25/11/2008 - Small firms get £7bn rescue package
A £7 billion package to help small firms that includes deferred tax rises and access to loans has been pledged by Chancellor Alistair Darling.
Amid warnings of the damage being caused as the UK heads towards recession, he promised real help to the companies that employ 60% of the private-sector workforce. He said smaller firms need help to equip them for the future, improve access to credit and ease cash flow. They will be allowed to spread tax payments, including VAT and national insurance "for as long as they need".
The Chancellor announced a £4bn deal with the European Investment Bank to provide money to UK banks to pass onto small and medium-sized enterprises (SMEs), in which seven banks have already expressed an interest. Around £1bn will be available to their customers by the end of the year, he said, and credit will also be offered through a temporary Small Business Finance Scheme worth another £1bn.
"It should allow small businesses to borrow sums from £1,000 to £1m at more flexible terms than before, making lending more affordable and easily accessible. This will help SMEs experiencing short-term cash flow problems get the funding they need."
Copyright © Press Association 2008
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