UK gets new business bank
Post date: Sep 24, 2012 10:22:42 PM
The UK government will set up a new bank targeting small and medium size businesses who struggle to get loans from traditional lenders.
UK-BUSINESS BANK - Britain's small-to-medium sized businesses are locked in a difficult situation.
To grow they need capital, at a time when banks are sometimes reluctant to lend.
Britain's Business Secretary Vince Cable has vowed to fix the problem.
At the annual conference for his Liberal Democrats party Cable said a new bank would be set up to cater for them.
VINCE CABLE, BRITISH BUSINESS SECRETARY, SAID:
"We need a new British business bank with a clean balance sheet an the ability to expand lending rapidly to the manufacturers, the exporters, the high growth companies that power our economy and I can announce to you today that we will have one."
One billion pounds will be set aside for the plan, and Cable hopes that figure could rise to 10 billion by cooperating with the private sector.
The bank will be run through existing lenders, and could be up in running within 18 months.
Mike Cherry is with the UK's Federation of Small Businesses.
MIKE CHERRY, UK FEDERATION OF SMALL BUSINESSES, SAID:
"We're still finding that four out of ten of our members who apply for additional funding are being turned down and that's gone from 40 percent to 42 percent which is clearly the wrong way."
Politcally it's an important step for the Liberal Democrats who are locked in an uneasy coalition government with the Conservative party, and comes with the blessing of Conservative finance minister George Osborne.
British taxpayers poured billions into banks to stop them going bust at the height of the financial crisis, and wouldn't welcome losing more money.
Andrew Potter, Reuters