£700m lending boost for small firms

Loans worth more than £700m have been secured by small and medium-sized businesses from the European Investment Bank (EIB), it was announced today.

The Treasury confirmed that over £700m of “affordable and easy to access funding” from the EIB had been approved for nearly 3,000 small businesses in the UK, through participating national banks.

Up to £4bn of EIB finance was made available to small businesses (between 2008 and 2011) in the 2008 Pre-Budget Report. It was left up to high-street banks to decide whether or not to apply for the funding.

So far, a total of £1.39bn has been secured by UK banks from the EIB, of which £726m worth of loans for 2,769 small businesses have been approved. Banks act as intermediaries who lend the cash on a ‘matched funds’ basis to small businesses. HBOS, Barclays, Close Brothers, Lloyds TSB, RBS Santander UK and Ulster Bank have all participated in the scheme.

The government said the funding would help to ensure that entrepreneurs with viable business ideas gain access to the capital they need.

“I want to encourage all businesses to get in touch with their local banks to find out if they can get access to this funding; it is an easy process and certainly worth pursuing,” said Ian Pearson, economic secretary to the Treasury

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