Retail groups have welcomed the government's new package of measures to help small businesses survive the financial downturn.

The proposals, announced by Lord Mandelson, are intended to give small firms with a turnover of under £25m easier access to loans.

ACS chief executive James Lowman said: "These announcements, if taken up by the banks, will come at a crucial time for many retailers. With financial support from both banks and suppliers being squeezed, retailers in financial difficulty are finding it increasingly difficult to gain credit.

"We are working with the government to make access to this finance as straightforward and widespread as possible," he added.

Following the announcement, ACS representatives met Treasury economic secretary Ian Pearson to discuss support for independent retailers.

Pearson said: "I am pleased to have met with ACS and hear about the concerns of local shops. The government is committed to assisting small shops and I believe that the announcements on loan guarantees will go some way to achieving this."

The package was also greeted with optimism by the Scottish Grocers Federation (SGF). Chief executive John Drummond said: "SGF supports any moves to make cash flow and credit more accessible."