Funding boost for smaller employers as Government extends business bank

Small businesses will be given access to a new package allowing them to invest and hand out more jobs.

The Government has confirmed that 250 million is being added to the British Business Bank - adding to the 1 billion announced last year.

Announcing the extra money, Deputy Prime Minister Nick Clegg said the British Business Bank (BBB) should allow thousands of small and medium-sized firms to make the most of the upturn in the economy.

Mr Clegg said the BBB will have the power to leverage the capital and lend much higher sums using Government guarantees.

He said that he would do all he could to help companies which have struggled to get the investment they need in the past.

And the politician said that the investment should allow companies to take on more staff, deal with more customers and buy new equipment.

"Small businesses are working hard to fuel our recovery and help us build a stronger economy," he said.

The BBB will be based in Sheffield, where Mr Clegg has his constituency.

John Allan, national chairman of the Federation of Small Businesses, welcomed the move, saying the BBB may increase competition and ensure businesses are allowed to grow.

He said many members of the Federation of Small Businesses have struggled to access finance through high street banks.

Mr Allan said: "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."

In his Autumn Statement later this week, Chancellor George Osborne is expected to curb business rates as part of a package of business support measures.

The BBB is the second bank this Coalition Government has set up since 2010.

Business Secretary Vince Cable said: "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."

Copyright Press Association 2013