Mandelson hails loan guarantee scheme (From Ludlow Advertiser)

Mandelson hails loan guarantee scheme

BUSINESS Secretary Lord Mandelson has hailed as a success a Government loan guarantee scheme after more than £1 million of loans a day was underwritten to companies during the first few weeks.

Since the launch of the Enterprise Finance Guarantee five weeks ago, some 400 loans, worth more than £40 million, have already been offered and are being processed, he announced.

Demand and awareness of the scheme is said to be growing steadily since the launch in January, with £14 million in loans processed in the past week alone. The scheme is on course to guarantee an additional £1.3 billion of lending to smaller firms over the year.

Lord Mandelson said: "These figures show the Enterprise Finance Guarantee is already making a difference to businesses. This targeted support is already helping hundreds of firms, which would not have been able to secure finance without a Government guarantee.

"Inevitably, it takes time for schemes to take effect but the amount already lent, in only a matter of weeks, is good news for business.

“We will continue to work with banks to ensure individual branches are offering the guarantee and will continue to promote the scheme to small businesses across the country."

He warned, however, the scheme was not a Government grant or bail-out and was firmly targeted at fundamentally viable businesses, which might be struggling in the short term but which, ultimately, would be able to repay their loans.

The Government also announced it had started a "mystery shopping" exercise to test that frontline bank staff around the UK were receiving the information they needed to promote the guarantee to viable customers.

New figures also showed the Government's Real Help for Business webpage - part of the national campaign to promote Government support schemes for businesses received more than 77,000 hits in the first two weeks.

In addition, around 30,000 businesses had also benefited from a Business Link "health check", which helped firms identify potential problems and find the best ways to remain resilient through the downturn.

For more information and to find out about the support available, go to www.businesslink.gov.uk/realhelp or call 0845 600 9006.