Peter Mandelson has announced today details of a package of measures designed to address the cash flow, credit and investment needs of small and medium businesses.

The support package, which builds upon the commitments outlined in November’s Pre Budget Report, consists of loan guarantees and a new Enterprise Fund aimed at helping companies struggling to access finance for working capital and investment.

The Government measures include:

• A £10bn Working Capital Scheme, securing up to £20bn of short term bank lending to companies with a turnover of up to £500m.

  (Note: this is aimed at banks to enable their lending capacity. We expect to see their first proposals at the beginning of March.)

• An Enterprise Finance Guarantee Scheme, securing up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m.
  (Note: this is available from today and is the main scheme focussing on working capital for smaller businesses)
• A £75m Capital for Enterprise Fund (£50m from Government augmented by £25m from the banks) to invest in small businesses which need equity.

(Note: fund managers will be appointed by the beginning of February; until then, interested businesses should telephone 0845 459 9780)

For more detail, there is a single online portal at:

www.businesslink.gov.uk/realhelp/finance