New £80bn fund will help firms

BOOST Ken Moon
BOOST Ken Moon

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A DECISION by the Bank of England to launch an £80bn fund to help firms apply for loans has been welcomed by the chairman of the Hampshire branch of the Federation of Small Businesses.

The Funding for Lending scheme has been announced by the bank’s governor Sir Mervyn King and aims to boost business lending by giving banks cut-price funds provided they pass on the benefits to business customers.

Hampshire FSB chairman Ken Moon welcomed the move, which he said could benefit smaller firms.

He said: ‘We support any money that comes into the banking system provided it is delivered to the small and medium enterprise sector, because obviously it has been struggling to gain financial support.

‘Since 2008 it has been extremely difficult with the seize-up of the banks and the economic climate.

‘The banks have been risk averse – quite understandably, in many respects – but that doesn’t help small businesses get finance.

‘How we get money to the SMEs is crucial as they are the ones who will take business forward in this country, create growth and drag us out of the mess we are in.’

The move by the Bank of England follows a survey by investment experts Skandia, which found that 41 per cent of people owe money on personal credit cards.

Under the Treasury proposals, British banks will be offered funding at low interest rates linked to lending performance.

However Mr Moon, who has been chairman of the Wessex branch of the FSB for six years, said it was vital that any money pumped into the banking system found its way to local firms rather than individuals.

‘This is quantitative easing,’ he added.

‘It all depends on whether it filters down to the people who need funding.’