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Small businesses to receive £4 billion in loans

31/10/08

The British Treasury has announced that the European Investment Bank (EIB) will lend £4 billion to small UK businesses which are having trouble borrow money from there normal sources.  With the credit crunch banks are withdrawing overdraft for small business and also making it more difficult for them to take out a loan.

The goal of this is to lend 50% more than last year and the plan is to lend more to small firms.  This plan is a part of the whole European Union.

According the Bloomberg.com, the task of the EIB is ‘to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States’.

It states that ‘The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives’.

In the words of Chancellor of the Exchequer Alistair Darling: “Small firms are vital to the strength of our economy. We need to make sure that despite the global credit crunch, they have access to the loans and capital they need to help their businesses grow and develop.”