The government is to invest £1bn into setting up a new bank to help increase the amount of lending to small businesses.
Speaking at the Liberal Democrat conference earlier this week, business secretary Vince Cable said the new business bank was designed to “help many small and medium-sized companies who have struggled for credit since the financial crisis”.
The bank will operate through existing lenders and will launch within the next 18 months. The government hopes the £1bn funding will be matched by private sector investment.
Retailers suggested that having a strong business and a decent relationship with your existing bank was still the best way to secure credit. Londis retailer Dee Sedani said: “I’ve been able to get finance, not as much as I would have liked, but it is possible if you have the right business plan and have a good history. That’s what banks are looking for when assessing applications.”
Jag Purewal of Spar in Stourbridge has also found that the situation had impoved for him. “I was able to get the credit I needed to open a third store earlier this year but I had been with my bank for a long time and had built up a good relationship with them which I think was the deciding factor for them,” he said.