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Government announces £70m business lending boost

Date Added: 26/03/2013  

Business secretary Vince Cable has announced a raft of new support for the UK's small to medium-sized enterprises (SMEs).

The Liberal Democrat minister revealed the government will be providing three new lenders - Market Invoice, URICA and Beechbrook Capital - with a £70 million funding pot. The government is going to put in £30 million and expects private investment to boost the total funds available to SMEs from the lenders to reach £70 million.

He stated that the money will be made available to SMEs to help them grow, which in turn should provide a boost to the country's economy, which is facing a triple-dip recession.

Each of the three lenders has committed to attracting additional funding from private sector investors, it was announced by the business secretary.

"A lack of access to finance is still choking off too many small businesses, preventing them from growing, taking on new staff or investing in new equipment," said Mr Cable, who made the announcement in a speech at the Federation of Small Businesses.

He added a range of actions are being taken by the coalition government in a bid to support SMEs and shake up business finance markets.

"Today's £30 million announcement is an important boost for non-traditional lenders with creative and innovative solutions. It will increase competition and create a more diverse and balanced market for business lending," said the minister.

At the end of last year, the government provided Funding Circle, Zopa, BOOST&Co and Credit Asset Management with £55 million of funding to help them lend money to SMEs in need of finance to grow their businesses.

Paul Aitken, chief executive officer and founder of alternative lender borro, recently criticised the chancellor George Osborne over the "hot air" regarding business lending in his Budget address to parliament last week.

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Posted by Miles Pritchard

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