UK business loan scheme 'sees low take-up'
Feb 17 2009
The government's £1 billion loan guarantee scheme for small businesses has only resulted in £12 million being lent to firms, according to the Financial Times (FT).
A month after the system was set up, analysis from the newspaper, including results from Barclays and the Royal Bank of Scotland, revealed that little of the money has reached companies.
The scheme, which is part of a £20 billion package of support for small businesses, is open to firms with a turnover of up to £25 million, which can borrow up to £1 million each.
John Cridland, deputy director-general at the Confederation of British Industry, tells the newspaper it is simply not working: 'Business has not seen anything get better.'
Stephen Alambritis, chief spokesperson for the Federation of Small Businesses, describes the funding as 'a trickle of lending'.
The FT's findings follow comments from Gordon Brown last week, who claimed 60,000 companies have benefitted from government help to cope with the credit crunch.
However, business leaders say this has been due to a scheme to defer tax payments and not due to increased access to finance.
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