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Funding idea is welcomed
THE launch of an £80 billion project aimed at helping firms grow their way out of the doldrums has been welcomed by a business leader in Worcestershire.
Roger Culcheth, chairman of the Worcestershire branch of the Federation of Small Businesses, told your Worcester News the ‘funding for lending’ scheme was a positive step forward.
Under the Bank of England-led project, small companies will find it easier to access loans.
The emergency measures aim to boost business lending by giving banks cut-price funds, provided they pass on the benefits to business customers.
It is hoped this will help avoid a further slump in the economy.
It comes after latest GDP figures revealed the country was still deep in recession.
One of the main complaints from small and medium sized firms has been the unwillingness of banks to borrow cash since the 2008 crash.
Mr Culcheth added: “The FSB has been pressing to try and get money out of the banks but it has been very difficult.
“Anything is worth having a go at, it’s just that I hope the Government doesn’t apply too many strings.”
The Bank of England will make cheaper funds available to banks equivalent to five per cent of the amount they currently lend. If the banks increase the amount they lend to consumers and businesses through loans and mortgages, they will be able to borrow more, with no upper limit.
The scheme, which went live last week, will be open for 18 months.
The Government has also launched a £40 billion scheme to guarantee priority infrastructure projects such as road building. It means ministers will agree to underwrite a host of schemes deemed risky in a bid to get them off the ground.