Business secretary Vince Cable has announced that £1 billion will be put towards a new state-backed business bank designed to help smaller firms expand, reports reuters.com.
The government hopes its backing will be ‘matched’ by private capital and eventually be supported by up to £10 billion of new and additional lending.
Consequently, businesses would be able to use the loans as they see fit – for example, using the cash as a stimulus for growth in recruitment. This way, even more jobs in London, Manchester, Birmingham and anywhere in the UK could be created, helping drive down unemployment.
Online poll service Usurv found that 73 per cent of Brits would back such a fund, cites londonlovesbusiness.com, while 62 per cent trust small business owners to ‘get the economy going’.
Cable commented on the funding: “For decades British industry has lacked the sort of diverse, long-term finance that is quite normal elsewhere. We need a British business bank with a clean balance sheet and a mandate to expand lending rapidly and we are now going to get it.
“I am working with the chancellor to develop a state-backed institution that will combine up to £1 billion of new government capital with a larger private sector contribution,” he added.