The Regional Growth Fund, which has been heavily criticised for only benefiting big companies, is to provide £500m in funding to small-to-medium enterprises, creating an estimated 4,000 jobs in the process.
The Coalition Government’s flagship recession-busting scheme will allocate £95m to firms, while RBS, NatWest and HSBC banks will top up the rest of the pot.
The Prime Minister, who unveiled the funding at the Government-organised ‘Exporting for Growth’ conference today, said: “I’ve lost count of the number of times people working in our small businesses have told me they can’t get a loan. We…need to be supporting the person who wants to start that small internet trading firm from their home, the plumber who sees the chance to start a business fitting green energy to people’s homes, the people who are brave enough to make a break and go for it.”
Many of the loans were relatively small, Cameron continued, but could not be secured without personal guarantees – and even then banks might not provide them.
“So Lord Heseltine has brokered a deal with RBS and HSBC. By using the high street banks like this, we will give support to those SMEs that can’t access commercial funding and we will help areas of our country other forms of business lending can’t reach. It’s a huge step forwards,” he attested.
The Government claimed that 4,000 jobs would be created as a result of the funding, 100% of which will be provided as grant finance to successful applicants. To qualify, companies must turn over less than £25m for the RBS and NatWest scheme and under €50m for the HSBC initiative.
The Regional Growth Fund is worth a total £1.4 billion and operates across England. To date, it has focused on larger businesses with a minimum grant of £1 million.
