Banks Unveil Support For Small Business Sector

Fri, 19 Dec 2008

Some of the UK's largest banking institutions have announced plans to boost small businesses through a package of funding and support.

The new measures by Royal Bank of Scotland, Barclays and HSBC come as high street banks face mounting pressure to lend to small firms at competitive rates .

Barclays said it will increase funding to small business customers by 10 per cent or £1.5bn in 2009. The extra support is in addition to its existing small business loans worth £15bn.

Last weekend HSBC announced plans to invest an extra £1bn into small firms to provide working capital. However, both HSBC and Barclays maintained that money would only be made available to businesses that were sustainable.

RBS confirmed it will guarantee overdraft and loan facilities for at least 12 months and also unveiled a package of measures to help customers through the economic downturn, including a business helpline and a series of seminars.

Alan Keir, head of commercial banking at HSBC, said: "To be able to step forward and do this is a business opportunity for us. We hope the government will welcome this, but for us it is very much about what we can do for our business customers."

Barclays' chief executive John Varley added: "During this time of uncertainty Barclays is committed to lending to and supporting our business customers,"

MPs and business lobby groups said the funding would be crucial to kick-start the UK economy.

However, Forum of Private Business chief executive Phil Orford has called for more action to be taken by Britain's banks .

He said: "All the banks are doing is lending money deposited by small businesses back to small firms, with no risk to them. Banks must significantly increase overdraft lending to support the small business sector."
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