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- Dains give cautious welcome to new Government help for businesses...
Tuesday 03 February 2009 -
Dains have given a cautious welcome to a new package of government measures designed to give small and medium-sized businesses a financial boost.
The package, announced by Business Secretary Lord Mandelson includes:
• a £10 billion Working Capital Scheme, securing up to £20 billion of short-term bank lending to companies with a turnover of up to £500 million. The government hopes the first £1 billion tranche of the scheme will be operational by 1 March.
• an Enterprise Finance Guarantee Scheme, securing up to £1.3 billion of additional bank loans to small firms with a turnover of up to £25 million. The guarantee, available through high street banks, will apply to loans and can also be used to convert existing overdrafts into loans to enable businesses to free up current overdraft facilities to meet working capital demands.
• a £75 million Capital for Enterprise Fund, made up of £50 million from government plus £25m from the banks, to invest in small enterprises that need equity but have exhausted traditional forms of finance to invest in their business.
Richard McNeilly, Business Development Partner at Dains said: “As accountants and business advisers, we are keenly aware of the challenges currently facing our business clients and have been working closely with them to help weather the economic storms. We welcome the government’s initiative and look forward to seeing this new money making a difference to businesses.
Businesses must be prepared however for a healthy challenge from the Banks. In this environment Banks will assess viability more keenly than ever and the provision of a government guarantee will not mean that poor propositions are supported. Many of our clients are supporting their applications with robust financial plan’s which safeguard the business and will attract the support of the Bank. In my opinion there will be too many businesses that will fail to gain the support they need because the financial plan is not sufficiently thought through – my advice is to engage professional advisers in order to give your business the best chance. Pleasingly there are grants available in some instances to help cover the cost of this professional advice”.
A new web portal, to direct companies to the most appropriate form of financial support and help them check their eligibility for a range of government aid, is available at http://www.businesslink.gov.uk/realhelp/finance
Primary offices at… Birmingham ● Burton ● Coleshill ● Lichfield ● Rugeley ● Swadlincote
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