£700 million lending boost for UK businesses

Over £700 million of affordable and easy to access funding from the European Investment Bank (EIB) has been approved for nearly 3,000 small businesses across the UK, through participating national banks.

At the 2008 Pre-Budget Report, the Government announced that small and medium sized enterprises (SMEs) could benefit from up to £4 billion of EIB finance between 2008-2011. Small businesses access the funds through intermediating national banks, which then lend the finance on a matched funds basis. In the first year the target was for UK banks to secure £1 billion of finance for SMEs from the EIB. This was achieved, with banks having now secured a total of £1.39 billion from the EIB.

Together with a range of other measures being implemented by the Government to support UK businesses, this scheme will help to ensure that well managed small businesses in the UK continue to have access to the best support available.

The Economic Secretary to the Treasury, Ian Pearson MP, said:

"Support for SMEs is key to driving growth in the UK, so I am delighted that small businesses are benefiting from this finance. This forms part of the Government's continued commitment to help SMEs access the finance they need to take their businesses forward, which is vital to our long-term growth strategy.

I want to encourage all businesses to get in touch with their local banks to find out if they can get access to this funding; it is an easy process and certainly worth pursuing".

Simon Brooks, European Investment Bank Vice President said:

"The EIB's ongoing support for small and medium sized enterprises in the UK through cheaper, simpler and more flexible loans will enable increased investment to expand business opportunities and create new jobs in difficult times. We wish to encourage continued contact between firms and partner banks to allow more companies to benefit from the extensive financial support available."

John Wright, National Chairman of the Federation of Small Businesses (FSB), said:

"The FSB welcomes the news that nearly 3,000 SMEs have benefited from low cost EIB loans. We continue to urge non-participating banks to enter the scheme to make the loans available to more SME clients. Tracking research by the FSB shows that credit conditions for SMEs continue to stabilise, with more requests for credit being accepted. Further promotion of EIB loans will continue to help the smallest companies through the recovery."

Posted Tuesday February 2^nd 2010
By HM Treasury