14/01/2009 - Small firms get £20 billion bailout
A £20 million bailout for credit-starved small companies has been unveiled by the Government, including taxpayer-backed loan guarantees.
The aim is to ensure essential working capital and short-term bank lending to companies with a turnover of up to £500 million.
An enterprise fund for firms which need urgent credit will be worth £75 million, made up of £50 million from the Government and the rest from banks.
A finance guarantee scheme aims to ensure a further £1.3 billion of bank loans to small and medium enterprises (SMEs) with a turnover of up to £25 million.
Business Secretary Lord Mandelson said that as hundreds more small businesses face being driven to the wall, it is "crucial" that the Government acts now.
While welcoming the announcement, the Federation of Small Businesses (FSB) has warned that it is a "last throw of the dice" to ease the stranglehold.
George Osborne, the Tory Shadow chancellor, said the announcement is a belated version of the £50 billion loans guarantee scheme floated weeks ago by his own party.
Copyright © Press Association 2009
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