Partner Article

Government invite proposals for management of £500m investment

The Government has issued two Requests for Proposals to manage £500m of investment, through the Business Finance Partnerships.

The BFP aims to ease the flow of credit to SMEs by diversifying sources of finances, and making them less reliant on bank lending.

Business Secretary Vince Cable said: “As businesses are continuing to struggle to get credit from their banks, developing alternative lending channels so firms are less reliant on banks is essential.

“The Business Finance Partnership will help to develop these channels over the medium term so businesses seeking credit have more options available to them.

“Our aim is to create a more diverse financial infrastructure which better serves the needs of our small and medium-sized companies.”

BIS will invest up to £100m through non-traditional lending channels, directly to small businesses, and the Treasury will invest up to £400m more through managed funds.

The Chancellor said: “These proposals are the next part of our credit easing programme, passing on the benefits of Britain’s creditworthiness to businesses, and opening up new options of finance for them.

“They are only possible because of the credibility that Britain has earned – and the low interest rates that come with it – as a result of taking the tough decisions needed to deal with our debts.”

The focus on non-traditional channels of finance will include peer-to-peer platforms, supply chain finance and mezzanine finance that can reach business with a turnover below £75m.

The application process is open until midday on July 20.

This was posted in Bdaily's Members' News section by Tom Keighley .