Bank in £10m loan lifeline to beleaguered businesses

The bank will be offering the funds to small and medium enterprises which are members of Edinburgh Chamber of Commerce.

It is seen as a welcome boost for small business owners, many of whom have struggled during the recession. The loans will be offered at competitive rates to businesses who have a "reasonable request".

Ron Hewitt, chief executive of the chamber, said it was a sign of renewed confidence in Edinburgh's economy. It could benefit dozens of companies whose annual turnover is less than 15m a year.

He said: "The bank has realised that the business community needs reassurance. The financial crisis meant the banks were being much more conservative. They had battened down the hatches, but now they are coming back to a more balanced position.

"Business success is the principle driver of the economy, and it entirely depends on confidence. This is an early sign of rebuilding that confidence."

He said many business owners had struggled to get loans during the recession. Many had also become more reluctant to borrow money, and had stopped relying on overdrafts.

Ian Collins, Bank of Scotland's commercial director for the east of Scotland, said they would be working with the Chamber to promote the availability of finance. He said: "We have earmarked 10m for Chamber members who need to access funding and who have a viable business proposition.

Michael Dixon, chairman of the Edinburgh branch of the Federation of Small Businesses, said the initiative was a welcome "short-term" boost, but would not solve some of the main problems.

He said: "In the longer term, we need a greater diversity of suppliers of different types of finance. We currently have a situation where the majority of business lending in Scotland is controlled by two major banks, and this can't continue."

SALMOND ANNOUNCES 5M FUND

BUSINESSES in Edinburgh will be able to get loans of up to 50,000 from a new 5 million fund announced by First Minister Alex Salmond.

The East of Scotland Investment Fund will be based on a similar scheme which has been running successfully in Glasgow and the west for several years.

Mr Salmond said the fund had the potential to generate increased turnover of 34.56m in small and medium sized enterprises and could create approximately 1,300 new jobs.

Businesses will be able to apply via local business gateways on a first come first served basis to borrow from a single pot of cash.