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Government extends business lending plan

Date Added: 02/07/2012  

The government's scheme aimed at boosting business lending to small to medium-sized enterprises in the UK is to be extended, it has been revealed by the chancellor of the exchequer.

George Osborne announced that his National Loan Guarantee Scheme (NLGS) - which was launched in March this year - will continue.

Those companies wanting to benefit from the project will need to be businesses with a turnover of not more than £250 million, with participating lenders including Barclays, Bank of Scotland, Lloyds TSB, Aldermore and the Royal Bank of Scotland.

The NLGS had originally seen the coalition government place the turnover figure at £50 million in a bid to help small firms to grow and boost the economy as a result.

Mr Osborne revealed this figure is now going to be extended to £250 million in order to allow more companies up and down the UK to benefit from the scheme.

It is claimed by the government that as many as 99 per cent of organisations in the country could be set to take advantage of the business lending initiative.

"The chancellor provided an update on the scheme’s progress, confirming that over 10,000 cheaper loans worth over £1.5 billion have been offered to businesses under the NLGS since its launch," the coalition announced in a statement.

It was also noted by the government that it has moved to increase the flexibility of the programme in a bid to make raising guaranteed funding more attractive and viable for the banks.

"For example, it will allow banks to issue guaranteed debt in an alternative, 'floating rate' format, meaning a wider range of investors should be attracted to buying NLGS bonds," it was added.

Last month, the Scottish government revealed in its Small to Medium-Sized Enterprises (SME) Access to Finance report that there had been an increase in business lending.

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Posted by Miles Pritchard

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