The chancellor has confirmed that the government will put £1bn into a new Business Bank aimed at boosting lending to small companies.
With the bank itself already announced by business secretary Vince Cable, George Osborne said: "We're creating a new Business Bank and providing it with £1bn of extra capital which will lever in private lending to help small and medium sized firms and bring together existing schemes."
The government will co-invest at least £300m over the next two years, alongside private investors, in channels that are expected to help diversify the sources of ﬁnance available to small businesses.
Up to £50m will be deployed next year, peaking at £300m in 2015/16, and then a final instalment of £150m in 2017/18. The bank iwill bring together, review and rationalise existing government schemes aimed at supporting access to ﬁnance for businesses under a single organisation.
It will deploy £1bn of additional capital and enable UK Export Finance (UKEF) to provide up to £1.5bn in loans to ﬁnance small ﬁrms' exports.
Responding to the news, Paul Aitken, CEO of personal asset lender borro, said: "This is certainly a positive step however, we have already seen various initiatives in play, to little effect. If we are going to encourage small and medium sized businesses to grow, the fovernment needs to pull out all the stops."
About Dan Martin
Dan Martin has 10 years experience as a journalist writing about entrepreneurs and the issues that affect them.
After three years working as a researcher for Sky News, he joined BusinessEurope.com as a reporter. This was followed by two years working as news editor for Startups.co.uk during which time Dan also contributed to Growing Business magazine. In 2006, he joined Sift Media as business editor before being promoted to editor of BusinessZone.co.uk. He also has responsibility for UK Business Forums, the UK’s most active online forums for small business entrepreneurs. In addition, Dan founded The Pitch, BusinessZone.co.uk's nationwide competition for small business owners. He host the grand finals in 2009 and 2010 in front of an audience of 300.
As well as interviewing many entrepreneurs, Dan has written content for leading business organisations such as the Department for Business, Enterprise and Regulatory Reform, British Chambers of Commerce, Forum of Private Business, Investors in People and Business Link for London. Among the publications that have quoted Dan are The Times, Mail On Sunday, Financial Times, Personnel Today and Bristol Evening Post. His articles have also been published by publications including eGov Monitor, Virgin Express in-flight magazine and Personal Success.
Dan regularly speaks at events about small business and social media issues. Among the events he has presented at are the National Federation of Enterprise Agencies' annual conference, Learning Technologies, Publishing Expo and World of Learning. He has also chaired high profile debates featuring senior representatives from Business Link and the Federation of Small Businesses and Dragons' Den judge James Caan.
Dan was named the 10th most influential political blogger on Twitter by the Independent and won the public award for best B2B tweeter at the Golden Twits 2010. He also organised the Bristol Twestival, part of a global Twitter driven charity initiative, in February 2009 and March 2010. Volunteers from 175 cities around the world organised events using the social network. In total, $350,000 was raised for charity: water in 2009 and $500,000 for Concern in 2010. In Bristol, £1,500 and £5,600 was raised.