§ Mr. HeppellTo ask the President of the Board of Trade what plans he has to make borrowing easier for small businesses seeking to expand after the recession.
§ Mr. Leigh[holding answer 18 May 1993]: Significant improvements to the loan guarantee scheme, as announced by my right hon. Friend the Chancellor of the Exchequer in his Budget statement, will be introduced from 1 July. There is an increase in the guarantee level from 70 per cent. to 85 per cent. aimed at those who lack security to offer against a loan. Also, for established businesses with a track record, the maximum loan size will be increased to £250,000. For all businesses, the premium payable to the DTI, by borrowers, will be reduced to 1.5 per cent. of the outstanding loan in respect of variable rate lending, to 0.5 per cent. in respect of fixed rate lending and to 0.5 per cent. for borrowers in inner city task forces and city challenge areas.
The Government are supporting five projects which are looking at ways of bringing together business angels—informal investors—and small businesses seeking investment.