Government announces underwriting scheme for SME loans

The government have just announced a scheme which is estimated to be worth around £20 billion and this scheme is going to offer underwriting for loans that are being given to small businesses. The FSB recently highlighted that small companies being unable to borrow money is a critical situation and the government are hoping to rectify this.

It is estimated that in the second quarter of this year around 40 percent of firms were turned down for bank loans they applied for. This is according to the latest research that has been released by the FSB.

This has caused a negative attitude in the market and the number of firms who are looking to grow has dramatically shrunk. A poll has recently showed that one of the main reasons for a company not expanding is that they are unable to access financial assistance.

The study looked at 17 different industry sectors and found that in all areas except for two of them confidence fell. The only areas to see an improvement in confidence were maintenance companies, as well as health companies.

One of the most dramatic decreases in confidence was seen in the property and financial services market. Other significant declines were seen in hotels, leisure, restaurants and retail.