UK State Backed Bank To Promote Lending To Small Businesses

Business Secretary Vince Cable announced today that the UK government will invest £1bn to set up a new state-backed business bank to promote lending to small businesses. It is hoped that the bank will eventually support up to £10bn of new lending for SME’s.

This is good news for small businesses in the UK who have been starved of credit during the recession. We hope that this will open up the market to competition in the banking industry which is currently dominated by 5 major high street banks. 

Many believe that the tightening of credit is restricting new businesses from growing and is stifling the recovery. The proposals for the new government bank could well serve to stimulate the economy and boost employment in the UK. This would be a major success for Vince Cable and the Liberal Democrats as it would enable them to stamp their credentials for promoting UK business.