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Budget promises new loan scheme for small businesses

Amidst the rather lukewarm response to the chancellor of the exchequer’s third budget on 21st March, there was a glimmer of hope for small to medium sized enterprises (SMEs) looking to secure business loans.

George Osborne’s announcement of the £20bn National Loan Guarantee Scheme (NLGS) means SMEs will be able to access loans with interest rates one percentage point lower than those available outside the initiative. Barclays, Santander, Lloyds and Royal Bank of Scotland have so far signed up and firms with an annual turnover of up to £50m will be able to participate.

Osborne commented, ‘The government promised to help small businesses get access to lower interest rates. Today, we deliver on that promise with a nationwide scheme. It's only because we've earned credibility with our deficit reduction plan that we have low interest rates, and it's only because of this scheme that we can pass the benefits of those low rates onto businesses.’

The discounted loans are being made available because the government is to guarantee £20bn of the banks' own borrowing, thereby allowing the lenders to borrow more cheaply than they normally do.

The Federation of Small Businesses (FSB) has given the scheme a warm welcome, but a number of small firms have complained that their main problem regarding bank loans is actually getting them approved, rather than the interest rate they have to pay.

FSB chairman, John Walker, said, ‘We are pleased that credit easing is now available for small firms to use. What we now need to see is clear communication to small firms and bank branch staff so that everyone is aware of it and how it will work so that businesses can benefit from it.’

SME’s able to prove efficiencies in all areas of their business may inspire more confidence in lenders. The ongoing pilot scheme for NQA Sustainability Assessed Certification could help the smaller business more easily demonstrate its’ ability to ‘be here tomorrow’ through sustainable practice.

Win confidence in your businesses’ true potential, contact NQA today to find out how you could be the first within your industry to achieve NQA Sustainability Assessed Certification via the ongoing pilot scheme.

Published: 02 April 2012