The government has announced that it has extended its Funding For Lending Scheme until January 2015, increasing the incentives available to banks and other lenders to lend to small companies.
The scheme offers funding to lenders at below market rate in return for lending to government target recipients. The extension focuses on increasing lending to the SME sector. Despite the introduction of the scheme there has been a fall in lending to this market and this extension in intended to target that issue.
The Chancellor of the Exchequer said: “This is a big boost for the small and medium sized businesses that are at the heart of the British economy. The Funding for Lending Scheme has already reduced the costs of household mortgages and loans for businesses. This innovative extension will now do even more for small and medium sized businesses so that they can play their full part in creating new jobs.”
We await the next round of lending figures with interest.