British banks are increasing the amount of available credit to small businesses by up to 15% this year, following the “Project Merlin” programme reveiled by Chancellor George Osborne.
Mr Osborne revealed the details of Project Merlin this week, and one of the major elements of the programme was an increase in lending to growing businesses and small business startups.
Small businesses will welcome news that UK banks have pledged a massive £76 billion available to them over 2011. This is more than £10 billion that had been made available the year before.
In addition to this, British banks have earmarked an additional £1 billion of equity capital for small firms in poorer, hard-pressed regions of the UK, and intend to make the credit available over a three year period to help stimulte economic growth in deprived areas of the country.
David Frost, Director General of the British Chambers of Commerce, has welcomed this move by the Government and the banks, stating the the big banks “renewed commitment to small businesses is welcome” but MPs and banks really need to focus on “improving frontline services for SMEs.” In spite of this, Mr Frost also added:
“The extra £1bn added to the Business Growth Fund is good news for small and medium businesses, particularly for those based in regions across the UK that will be hit the hardest by public sector cuts.”
Mr Frost went on to add:
“We want to see a radical package to boost enterprise growth in next month’s Budget, with the Business Growth Fund and all other initiatives focused on generating stronger companies, more companies, and jobs.”