The Government has announced that its guarantee scheme to support business loans will continue for another year.
From April 2010 to March 2011, the Enterprise Finance Guarantee scheme will support up to £500 million of bank loans to viable businesses that would otherwise lack the security or track record to obtain commercial lending.
Since its launch in January 2009, more than 6,850 businesses have been offered loans totalling more than £692 million through the scheme. And more than £1 billion of eligible applications from almost 9,000 small and medium sized businesses have been granted, are being processed or assessed.
Business Secretary Peter Mandelson said:
"Closing our business support schemes before the recovery is firmly established would be a false economy. It would risk derailing the recovery by stifling the investment plans of the businesses that create growth and jobs.
"Although almost all firms report that they are able to get the lending they need, we are continuing this essential support to small businesses because for some of them securing credit remains difficult.
"We must ensure viable businesses are able to secure the lending they need to invest and grow as the economy picks up. The Enterprise Finance Guarantee has been welcomed by business and it will play a vital role in encouraging enterprise and investment and driving productivity and growth throughout the UK economy."
Monitoring by the Department of Business Innovation & Skills shows that around half of Enterprise Finance Guarantee loans have been used to help companies obtain working capital, while a significant proportion has been used for growth and investment, including business expansion, purchasing new equipment or developing a new project.