EIB loans 'will take time'
Nov 03 2008
Loans from the European Investment Bank (EIB) will take time to filter through to companies, who may not see them until late next year, says a entrepreneur.
Marc Bringmann, a entrepreneur attempting to gain funding for a new restaurant, tells the Times he thinks the loan will not reach small firms in the UK until 'the second half of 2009'.
He says finding funding for his new venture has been like 'banging on closed doors' and banks are creating excuses not to give out the money.
The EIB revealed last week it intends to make an extra £4 billion available to UK firms who are struggling to cope in the crunch.
Andrew Carruthers, chief executive of Spark Ventures, which invests in start-up companies, is skeptical of the European deal and also says the new Small Firms Loan Guarantee scheme from the government - which guarantees 75 per cent of any loan up to £250,000 - is 'a total red herring'.
He tells the newspaper banks will find it 'too bureaucratic and time-consuming to administer' and is advising firms to become cashflow even and spend each pound like it is their last.
William Flatau, of the business broker First Finance, which set up a website to track loans to businesses, says the only thing which will change the current market is for banks to cut rates.
'My message to the banks is simple: people are throwing money at you now so cut your rates,' he says.
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