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    Darren Beddard    Group moderator
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    Government help for small business
    The Government has this morning pledged to boost the size of loan guarantees to small and medium-sized businesses to provide them with vital working capital. Below are the main points


    Working Capital Scheme

    Open to "ordinary-risk" businesses with a turnover of up to £500m

    Government will guarantee up to 50pc of new and existing working capital credit lines, to secure a total of £20bn

    Banks must use capital freed up by the guarantee for new lending

    Banks will pay a premium to the government for the scheme

    Participating banks are Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland


    Enterprise Finance Guarantee Scheme

    Open to firms with a turnover of up to £25m

    Applies to loans of as much as £1m for a period of up to 10 years

    Government will provide £1bn of guarantees to support £1.3bn of bank loans

    The loan guarantees can be used to convert existing overdrafts into loans, thereby freeing up overdrafts to be used for working capital


    Capital for Enterprise Fund

    A £50m fund to convert businesses' debt into equity, announced in the pre-budget report, has been increased to £75m

    Provides long-term capital to firms which already have high levels of debt

    Made up of £50m of government funds and £25m from Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland

    The fund will be managed externally

    Please follow link for more info

    http://www.ft.com/home/uk
    • 14 Jan 2009, 10:11 am