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Chancellor announces small business lending boost

Date Added: 26/03/2012  

Plans to help the UK's small to medium-sized enterprises (SMEs) to access money easier have been revealed by chancellor of the exchequer George Osborne.

The Conservative MP announced he is using the UK's budget credibility in financial markets in order to provide up to £20 billion of government guarantees on unsecured borrowing by banks.

It is claimed this will enable them to borrow at a cheaper rate than at the moment, which will lead to them growing and boosting the economy as a result.

"The government promised to help small businesses get access to lower interest rates. Today, we deliver on that promise with a nationwide scheme," Mr Osborne said.

However, usual lending parameters will apply, due to the fact that banks retain the credit risk with the loans to SMEs.

This comes shortly after the Confederation of British Industry called for the coalition government to open up new methods of non-bank business lending.

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Posted by Michael Beam

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