Former chief executive of the Bank of Scotland Sir Peter Burt has been appointed to lead discussions on the British business bank, which is expected to deploy as much as £1 billion of new funding to SMEs.
As confirmed by the chancellor George Osborne in his Autumn Statement, a proposed £300 million of the funding will be invested alongside the private sector in sources of finance that will help diversify the business finance market.
The Budget 2013 is set to offer more details on how this funding will be made available, but it is bound to be of welcome relief to struggling UK firms in need of a shot in the arm to grow and expand.
The new chair of the business bank advisory group Sir Peter Burt said: "There has been a significant long-standing gap in SME finance, so it is welcome news that the government is taking action to tackle this problem and help provide long-term finance solutions for SMEs."
Despite government efforts to boost lending to small businesses, such as through the Funding for Lending Scheme, it appears a number of companies remain in the dark on their options for financing.
Recent research from Aldermore showed that 38 per cent of SMEs were unaware of government grants and schemes designed to help them get their business ideas off the ground.
In the survey of 300 firms, it was also revealed that 35 per cent of SMEs did know about government-backed initiatives but had not applied for funding, which could prove vital for their development.
Managing director of Aldermore Asset Finance George Ashworth said: "There is clearly a big job to be done in helping 'time poor' business owners find out more about government-backed schemes designed to help them grow their business."
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