Chancellor launches scheme to boost small business

Chancellor George Osborne has today launched a scheme to help small businesses access cheaper finance.

The National Loan Guarantee Scheme (NLGS) will help businesses with an annual group turnover of up to £50 million.

Using the UK's budget credibility in financial markets, the Government will provide up to £20 billion of government guarantees on unsecured borrowing by banks, enabling them to borrow at a cheaper rate.

Participating banks will pass on the entire benefit that they receive from the guarantees to smaller businesses across the UK through cheaper loans. Businesses that take out an NLGS loan will receive a discount of 1 percentage point compared to the interest rate that they would otherwise have received from that bank outside the scheme.

George Osborne said:

"The Government promised to help small businesses get access to lower interest rates. Today, we deliver on that promise with a nationwide scheme. It's only because we've earned credibility with our deficit reduction plan that we have low interest rates, and it's only because of this scheme that we can pass the benefits of those low rates onto businesses."

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