The Government steps in – about time!
The banks have not delivered so the Chancellor of the Exchequer, George Osborne, used his speech to the Conservative Party Conference to announce proposals for a scheme of ‘credit easing’ designed to ensure small businesses can access much-needed credit.
The funding for credit easing will come from the Treasury, but details on how the scheme will operate are at an early stage. It’s believed the scheme would see small business loans being packaged together and guaranteed by the Government.
It is believed that the Bank of England will be tasked with running the credit easing programme.
By circumventing the banks, it’s hoped that the rates of interest charged on loans will fall significantly, and better reflect the current rock-bottom Bank of England base rate.