LONDON, January 14 – The British government unveiled a multi-billion-pound package of loan guarantees and a new enterprise fund on Wednesday to help small businesses suffering from the credit crunch.
Business Secretary Peter Mandelson said it was "crucial" that the government acted to provide help for smaller companies amid warnings that dozens were going bust every day.
"What we\’ve got to do is concentrate on restoring the main British banks to health, building up and bolstering their lending activities so that not only do they lend more to going concerns, to companies which are the backbone of the UK economy, but sustain those existing credit lines which many firms think are in danger," he told Sky News.
The measures include a 10-billion-pound (11-billion-euro, 14.7 billion-dollar) working capital scheme, securing up to 20 billion pounds of short-term bank lending to companies with a turnover of up to 500 million pounds.
The Federation of Small Businesses welcomed the government\’s announcements, but warned it was a "last throw of the dice" to unblock lending from banks to small and medium-sized enterprises.
Business leaders have said the lack of available finance played a part in the downturn of the British economy, which the British Chambers of Commerce said had seen a "frightening deterioration" towards the end of 2008.