Extra support for small firms in the UK

LONDON, UK: Britain's small and medium-sized businesses stand to benefit from up to £4 billion in loans from the European Investment Bank (EIB) over the next four years the Chancellor of the Exchequer, Alistair Darling, has announced.

Speaking at a seminar on supporting small business hosted by the City of London Corporation at the London Guildhall, Alistair Darling said: "Small firms are vital to the strength of our economy. We need to make sure that despite the global credit crunch, they have access to the loans and capital they need to help their businesses grow and develop."

"I am delighted by this commitment from EIB and UK banks to get more finance to small firms, and to ensure the funding is more flexible and easier to access than in the past."

The seminar was attended by the President of the EIB, Philippe Maystadt, the Secretary of State for Business, Enterprise and Regulatory Reform, Lord Mandelson, and representatives of the UK banking, SME and wider investment communities.

Based on the UK's shareholding in the EIB, British small businesses should be able to benefit from around £4 billion of lending from the EIB between 2008 and 2011. As a first step towards this, UK banks have signaled their interest in securing around £1 billion a year from the EIB.

Several UK institutions already take EIB loans to support their small business clients. They have now committed to discussing with the EIB the potential to draw further additional loans. Other institutions supporting SMEs that have not worked with the EIB in the past have also committed to discussing with the EIB how they can work together, and where they are commercially competitive, use EIB loans to deliver the most effective support to small firms with sound business propositions.

Together with the range of other measures being taken by the Government, these commitments will contribute to ensuring strong small businesses in the UK have access to the best support available.