Business

New measures to help small firms unveiled

Business Minister Mark Prisk
Image caption Mark Prisk said the government was committed to making the UK as entrepreneurial as possible

A series of measures that aim to make it easier for the UK's five million small firms to do business have been unveiled by the government.

They focus on ways of improving access to finance, and making it easier for small businesses to do work for the public sector.

The measures also aim to help more social tenants start up their own businesses from home.

The government said it wanted to create an "entrepreneurial decade".

The measures were announced at a summit attended by Business Secretary Vince Cable, Business Minister Mark Prisk, Cabinet Office Minister Francis Maude, and Lord Young - the new enterprise tsar.

Regarding access to finance, the government announced that the Enterprise Finance Guarantee (EFG) Scheme will continue for the next four years.

Under the scheme, the government guarantees 75% of a small firm's bank loan, with the banks covering the remaining 25%.

The government said the extension of EFG - which was introduced by the former Labour administration - would make a further £2bn available to small firms.

Peter Ibbetson, chairman for small business at Royal Bank of Scotland, said he "warmly welcomed the decision to extend EFG".

He added: "This scheme is hugely important to wider efforts to ensure small businesses get the support they need."

In addition, the government is to commit an extra £200m to Enterprise Capital Funds.

These enable firms to sell debt in exchange for a stake in the business.

'Tackle misconception'

Regarding helping small firms win more public sector contracts, the government said it would aim to remove any qualification barriers that prevent small firms from accessing government contracts.

It will also require that all government contractors pay their suppliers within 30 days.

The government also said it would work with social landlords "to tackle the misconception that social tenants cannot start up a business".

Minister for Business and Enterprise Mark Prisk said: "As a former small business owner I know how important our SMEs [small and medium-sized enterprises] are to the growth of this country.

"I entered government with the goal of making this the most entrepreneurial decade in our history, and I'm confident today's announcements will make that a reality."

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