Government unveils SME lending plans
Funding Lending Scheme aims to get businesses moving again
The Treasury and Bank of England have unveiled the government’s latest scheme to get SMBs moving again, with the launch of a new business lending programme.
The Funding for Lending Scheme (FLS) will aim to enable easier access to loans for banks, which in turn will create a bigger pool of money for businesses to dip into.
The Treasury says that the FLS is introduced against a backdrop of euro debt paralysis, which is knocking on to business in the UK.
By reducing the price at which banks can access funds, it is hoped that businesses can access cash more easily, helping to kick the stalling economy back into action.
There is a potential £80 billion that could be released onto the market the Treasury says.
With the channel both servicing the SMB market, and indeed being partially made up on SMB resellers and so forth, the access to funds could be good news.
SAP recently told ChannelBiz that its SMB partners were ready to grow their business despite the economic turmoil, but in some instances were being held back by financing.
However the attitude from smaller businesses on a wider scale is becoming more positive and many are expecting good growth, according to the business software specialists.
Should the FLS scheme do what it intends, the channel is only set to benefit as businesses start increasing IT budgets again with more money to spread around.
Confederation of British Industry Director-General John Cridland, said of the scheme:
“It is a positive step towards stabilising funding for lending, particularly given the current market turmoil driven by the Eurozone crisis.
“Smaller businesses I talk to are concerned with cost of borrowing as well as with its availability. Funding for Lending will help the transition to a ‘new normal’, where structural changes in banking, driven by capital and liquidity reforms, are impacting on business finance.”