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£870m of lending 'unlocked through government scheme'

Date Added: 13/09/2013  

The government has claimed that almost £1 billion in new lending has been released through its Business Finance Partnership scheme since the launch of the programme.

It was announced by the Treasury that it has unlocked £870 million of lending since it was set up by the coalition government in March.

The government stated that in the six months of the scheme so far, it has raised £5 of lending for every £1 of taxpayers' money.

It was pointed out by the Treasury that six new lending funds have been created by the scheme and they are backed by investors who previously lent to large businesses but are now deciding to redirect their money to medium-sized companies.

George Osborne, chancellor of the exchequer, stated that the success of this programme in the last six months shows how the government is working on opening up brand new sources of finance for small and medium-sized businesses.

"By showing that we have the confidence to invest in great British businesses, we have helped persuade investors to lend five times as much money as the government alone is putting in," he said, adding: "It is a fantastic success story: the businesses receiving the loans can grow and invest, while the lenders are building a whole new private sector market which will drive further lending to support the economic recovery."

Mr Osborne recently claimed that the UK economy is turning a corner, after official figures show GDP was 0.7 per cent up for the second quarter of the year.

However, many companies are still finding it hard to survive and some may need to take business debt advice if they are to avoid being served with a winding up order.

The government recently announced that it is extending the Funding for Lending Scheme it set up in conjunction with the Bank of England last year. A statement from the Treasury and the Bank of England said: "The fee structure and operation of the scheme will be unchanged during the extension period."

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Posted by Michael Beam

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