Chancellor Alastair Darling revealed today he has secured around £4bn of lending for UK businesses from the European Investment Bank (EIB) up to 2011.
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This comes a week after the government said it would attempt to ‘smooth communications’ in the hope of making some of the EIB’s recently-announced credit facility available to British businesses.
Several UK banks have already signaled their interest in securing around £1bn a year from the EIB. Other financial institutions that already receive loans have committed to negotiating additional finance, the government said in a statement.
Darling, who was “delighted” by this latest commitment,said: “We need to make sure that they [SMEs] have access to the loans and capital they need to help their businesses grow and develop.”
Earlier this autumn as the effects of the credit crunch began to snowball into something more sinister, the EIB announced it was raising the level of lending available to SMEs by 50% compared to 2007, as part of a lending envelope worth €30bn (£24m).
The bank also said it would simplify its lending processes,financing up to 100% of the intermediary’s intervention instead of 50% of project cost and setting no limitation on the purchase of used fixed assets – previously set at 25% – among other things.