Nick Clegg reveals extra funds on top of £1bn announced last year for lending to small and medium-sized companies
Another £250m is being pumped into the British Business Bank to help thousands of small and medium-sized firms take advantage of the economic recovery.
The deputy prime minister, Nick Clegg, said the extra money – on top of £1bn announced last year – would ensure companies can access funds to invest and take on staff.
The bank will be able to leverage the capital and use government guarantees to lend much higher sums. Ministers have now agreed that it will be based in Sheffield.
Clegg, the Liberal Democrat leader, and the business secretary, Vince Cable, will unveil the move on a visit to a small firm in west London this morning.
It is said to be the first in a series of announcements on boosting business leading up to the autumn statement on Thursday.
The chancellor, George Osborne, is expected to curb business rates as part of the package.
Clegg said: "Small businesses are working hard to fuel our recovery and help us build a stronger economy.
"I am determined that we do all we can to help companies that have struggled to get the investment they need – investment that means they can employ those extra people, take on that new order, and buy new equipment."
Cable said: "The British Business Bank is the second bank this government has set up since 2010 and is focused on helping SMEs grow.
"It is a new long-term institution which is helping to create more competition in the banking sector and give access to finance to businesses who are currently struggling with high street banks, to get the cash they need to invest in their future growth.
"Since I announced this initiative more than 10,000 businesses have already been helped and this new money will help it do more of that. The British Business Bank is fixing a big long-term problem in our banking system and it is set to unlock up to £10bn of finance over the next five years to help small and medium-sized businesses grow."
The bank is already operating in an interim basis, and will become fully fledged when European approval has been given next autumn.
John Allan, national chairman of the Federation of Small Businesses, said: "Our members will welcome this further commitment to the Business Bank, which has a key part to play in fostering competition and ensuring businesses get access to finance they need to grow.
"The finance through the Business Bank needs to help very small and startup businesses who we know find it hard to raise finance through the main high street banks.
"Putting all these government-backed products under the control of the Business Bank will mean small firms looking for products know where to go for help and advice, while also promoting alternative types of finance will give firms more choice than just traditional debt finance through the high street banks."
Reported by guardian.co.uk 44 minutes ago.