Small business bank accounts to receive aid from new scheme

Small business bank account holders will soon be receiving aid from a new credit easing scheme, according to the Chancellor of the Exchequer’s Autumn Statement.

The National Loan Guarantee Scheme will make it easier for small businesses to take out business loans by effectively lowering the interest rates on these loans for borrowers.  Chancellor Osborne said that the Government needs to take the steps to provide better access to credit to smaller firms, as High Street banks are not meeting their target figures under the Project Merlin lending scheme when it comes to small businesses.

Banks damaged by the credit crunch and resultant worldwide economic slowdown are refusing to lend currently, despite already low rates, said the chancellor, likening it to the transmission of a car not working properly, stating that no matter how hard you may put your foot down on the accelerator, the tires simply won’t spin.  It seems to be common knowledge that small businesses in the UK are finding it a struggle to secure credit, Mr Osborne continued, due to bank weakness, so he says he is determined to breathe new life into the economy through credit easing.

Essentially a mechanism used by the Treasury to provide credit to small businesses directly, credit easing will see the Government take out credit  and then pass it along to small businesses that qualify for the programme, which Chancellor Osborne is calling the National Loan Guarantee Scheme.

The chancellor said that the Government will be using the credibility it has cultivated within the international marketplace in order to aid the domestic economy of the UK.

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