The National Loan Guarantee Scheme has been launched this week by Chancellor George Osborne, with four high street banks signing up to provide assistance and support for SMEs.
The scheme will provide cheaper funding for SMEs who sign up, due to lower interest rates.
£20bn is to be invested into the scheme, and the news has been greeted with a mixture of praise and tentativeness.
George Osbourne told the BBC ‘The government promised to help small businesses get access to lower interest rates. Today we deliver on that promise with a nationwide scheme’.
Director General of the British Chambers of Commerce John Longworth has said that ‘while credit easing is a step in the right direction, it is not a panacea for all the problems faced by businesses trying to access finance’.
One notable absentee from the list of banks that have signed up for the scheme is HSBC, who have cited its inability to participate on ‘commercially viable terms’.
The National Loan Guarantee Scheme’s official website has outlined the scheme as follows: