Business & Enterprise Committee

25 March 2009  (PN 32)

GOVERNMENT’S SUPPORT TO HELP BUSINESSES ACCESS FINANCE TO BE EXAMINED BY BUSINESS AND ENTERPRISE COMMITTEE

The Business and Enterprise Committee announces today that it will look at the Government’s support package to ease the access to finance for businesses.

The Committee will take evidence from business representatives at its meeting on Tuesday 2 June.  Further information relating to that meeting will be provided at a later date.

To inform the Committee and its evidence session, businesses are invited to submit comments.  Comments should be e-mailed to becom@parliament.uk no later than Friday 22 May.

The Committee would be interested to hear views on:

• The threshold of an annual turnover of £25m for applicants;

• Whether the amount of money available is reasonable to enable businesses to continue operating;

• Whether loan guarantees are the best method of addressing the difficulties in businesses accessing finance and, if not, what is the best method;

• To what extent the loan guarantee will encourage new lending by banks;

• The extent to which banks are making this scheme available;

• Whether businesses in some areas of the UK have more difficulty in accessing the scheme than businesses in other areas;

• Whether applying to the scheme creates an administrative burden on those applying;

• Whether the scheme has been effectively promoted to the private sector;

• Any other views stakeholders think the Committee should be aware of.

Further information on this evidence session can be obtained by contacting the Business and Enterprise Committee team on 0207 219 5777 or at becom@parliament.uk

Background

The Department for Business, Enterprise and Regulatory Reform launched the Enterprise Finance Guarantee scheme on 14 January 2009.

The scheme will support up to £1.3b new lending to SMEs.  Businesses with an annual turnover of £25m could apply for loans of between £1k to £1m, repayable over a three month to ten year period.  The guarantee can be used for up to 75% of new loans, refinancing existing loans or converting part of an overdraft into a loan.  The scheme will run until March 2010.  The scheme is available through 26 lenders.  On 20 February 2009, BERR announced that over 400 loans, worth around £40m, had been offered.

Further Information:
Committee membership is as follows:

Chairman: Peter Luff MP (Con) (Mid Worcestershire)
Mr Adrian Bailey (Lab) (West Bromwich West)
Roger Berry (Lab) (Kingswood)
Mr Brian Binley (Con) (Northampton South)
Mr Michael Clapham (Lab) (Barnsley West and Pen.)
Mr Lindsay Hoyle (Lab) (Chorley)
Miss Julie Kirkbride (Con) (Bromsgrove)
Anne Moffat (Lab) (East Lothian)
Mark Oaten (Lib Dem) (Winchester)
Mr Lembit Öpik (Lib Dem) (Montgomeryshire)
Mr Anthony Wright (Lab) (Great Yarmouth)

Media Enquiries: Laura Humble, Tel 0207 219 2003/ 07917 488 489, email: humblel@parliament.uk
Specific Committee Information: Tel 020 7219 5777, email: becom@parliament.uk