BUSINESS Secretary Vince Cable yesterday gave a £110 million boost for small businesses by handing cash to four “non-traditional” specialist lenders.
The Department for Business Innovation & Skills (BIS) said the first £55m tranche of the £100m Business Finance Partnership (BFP) pot earmarked for non-traditional channels in May will be match-funded by recipients, giving an initial total of £110m.
Four schemes won backing from the fund: peer-to-peer lenders Funding Circle and Zopa will receive £20m and £10m respectively to support sole-traders; fund management company Boost&Co will receive £20m to set up a fund that will make small business loans between £1m and £8m; and Credit Asset Management, a subsidiary of listed financier City of London Group, will receive £5m to provide asset finance and professions loans. The remaining £45m will be allocated to further bidders in the New Year, BIS said.
Cable said SMEs needed a “diverse range of finance options”, adding: “These new forms of finance are still small in scale today but they should, over time, bring additional choice to the lending market.”
Cable said the BFP – as well as the £1 billion business bank confirmed in last week’s Autumn Statement – would tackle “long-standing, structural gaps in the supply of finance for SMEs”.