Cameron Directs £95 Million To SMEs

Thursday, 10 November 2011
Article Date: Nov 10 2011
Todd Cardy

Prime Minister David Cameron
Prime minister David Cameron has announced a business growth package that will see an extra £95 million investment in the Regional Growth Fund directed to finance small and medium-sized enterprises (SMEs).

The package, which will be administered by high street banks the Royal Bank of Scotland (RBS) and HSBC, has been designed to assist SMEs considering investing in new capital assets.

Cameron told the Exporting for Growth conference in central London today, ‘Often it’s a small investment – maybe just £30,000 – that can create the jobs and kick-start the innovation and exports that we need.

‘But these are the very loans that you simply can’t get without personal guarantees, like putting up your house – and even then the banks might say no. That’s got to change – and we’re going to use the Regional Growth Fund to help change it.’

Under the deal, the government will provide £95 million of new Regional Growth Fund money to SMEs, with RBS and HSBC administering the scheme and providing new lending as part of the campaign.

The Regional Growth Fund is a £1.4 billion fund, which is designed to encourage enterprise, growth and jobs in the private sector and support areas and communities that are dependent on the public sector.

Cameron adds, ‘By working with high street banks like this we will give support to those SMEs that can’t access commercial funding and we will help areas of our country that other forms of business lending can’t reach.

‘That’s great news for small businesses, great news for local communities and a great example of how banks are stepping up to the challenge of getting our economy moving.’

Cameron also flagged that details of a new scheme for SMEs, called ‘credit easing’, could be announced within weeks. The scheme, which George Osborne outlined during his Conservative Party conference speech in October, would extend corporate bonds to smaller businesses and see the government lend to SMEs by buying billion of pounds worth of bonds. It would allows the businesses to raise cash without having to rely on bank loans.

He says, ‘Over the coming weeks we are going to look at the whole range of options to improve the ability of companies to borrow or access funding – including, for example, through credit easing.

‘So I want everyone in this hall to take the message out from here that these funds are available to SMEs. The ones who’ve tried and failed to get credit, the ones with no trading history, the ones with no collateral to put up against a loan.

‘There are billions of pounds waiting in banks and in other investment funds. The money is there now.’

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