BBA welcomes impact of loans scheme

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Banks have updated on the progress of the Enterprise Finance Guarantee scheme, aimed at improving loans flows to businesses.

The comments, from the British Bankers' Association BBA, follow an announcement from the business secretary Lord Mandelson, showing that £40 million of loans have been offered by banks in the scheme so far.

This is despite the plan having been launched five weeks ago.

A lack of available credit from banks has been one of the prime factors behind the economic downturn, analysts say.

Not being able to secure loans have led some firms to cut output and reduce staff - putting negative pressure on GDP figures.

BBA director Paul Ross said: "The Enterprise Finance Guarantee scheme is only in its infancy but is already helping banks provide small business finance to viable businesses which might otherwise struggle to get credit.

"Banks are working closely with their customers to help them in difficult economic conditions and with the government to find new and innovative ways to support the UK economy and to provide lending to firms."

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2009-02-23 12:02:18 © Moneyextra.com