Government 1bn Business Bank Stimulation

Government £1bn Business Bank Stimulation.

Business secretary, Vince Cable is to announce that the government is to put £1bn into creating a bank designed to increase the amount of lending to business.  The new bank will help many small and medium-sized companies who have struggled for credit since the financial crisis.

The bank will operate via existing lenders, and is due to start within 18 months.  It is hoped the money will be matched by private sector investment.  Government support will be in the form of both guarantees and equity.  

According to John Longworth, director general of the British Chambers of Commerce, the funding announced by Vince Cable is the first step in a journey toward a British business bank that will enable new and growing companies to get access to capital in the same way that they do in Germany, USA and South Korea.