SMEs are set to benefit from a government investment of £95m to help boost growth and rebalance the economy, prime minister David Cameron has announced.
According to BIS, the funding is expected to create at least 4,000 jobs and unlock around £500m of investment by SMEs.
RBS, NatWest and HSBC have agreed to distribute the £95m, which is part of the government’s Regional Growth Fund. RBS and NatWest will facilitate £70m and HSBC will facilitate £25m.
Through these schemes, small businesses that are unable to secure commercial funding for their project have the potential to benefit from government support through the banks’ regional networks.
SMEs can qualify for a grant if they are going to invest in capital assets, such as plant and machinery, and create jobs but cannot get normal bank finance.
Grants of up to £500,000 will be awarded alongside the award of a new bank loan on commercial terms.
To qualify for the NatWest and RBS scheme, SMEs will need a turnover of less than £25m, while qualification for HSBC’s scheme requires SMEs to have a turnover of less than €50m (£43m).
According to BIS, grants can only be awarded where the bank would decline a loan application using its normal credit criteria for SME lending.
Grants will not, however, be provided where the reason why the original loan application is declined is that the beneficiary has insufficient security to support the new debt.