Lending Scheme Expanded to Spur Credit Flow

With the failure of the Government's National Loan Guarantee Scheme to boost the flow of credit substantially, Chancellor George Osborne announced today that the scheme will now be extended to "99.9%" of all companies. Initially, the £20 billion in state-backed loans was only available to businesses with a turnover less than £50 million over a two-year period through participating banks. But, in the three months since the scheme became available, only 10,000 loans worth some £1.5 billion have been offered. To increase participation, the scheme is now available to businesses with a turnover less than £250 million.

According to The Independent, the coordinated action by the Bank of England and Treasury will see an estimated £80 billion offered to banks on the condition they pass it on to businesses in the form of cheaper loans. An additional scheme that offers six-month liquidity to banks in tranches of at least £5 billion a month was also launched.

Read More at The Independent:

http://www.independent.co.uk/news/uk/politics/business-lending-to-be-extended-7888585.html