Rachel Reeves is poised to introduce a significant support package for small businesses in one of her final duties as Chancellor.
In her upcoming Mansion House speech, Ms. Reeves will reveal an enhancement in financial aid for small and medium-sized enterprises (SMEs, aiming to unleash billions in potential.
The primary initiative involves broadening the Government’s guarantee on commercial loans for SMEs to facilitate their growth. The Growth Guarantee Scheme (GGS) currently offers a 70% government guarantee on loans to small businesses, having already allocated over £3.7 billion to SMEs since its inception in 2022.
As part of the Chancellor’s proposal, the scheme will receive a £6.5 billion boost, projected to assist 33,000 businesses nationwide over the next three years. Additionally, the loan term will be extended from six to ten years, and businesses with turnovers up to £54 million will now qualify, up from the previous threshold of £45 million.
Ms. Reeves emphasized the importance of supporting small businesses, stating, “Our economic strategy has positioned Britain for stability, enhanced investment inflows, and implemented reform. Small businesses are vital to our economy and regional growth, and today’s reforms mark a significant milestone in empowering their potential.”
The announcement coincided with the Chancellor’s reminder to Andy Burnham of the necessity for a well-thought-out plan upon assuming leadership at No 10 Downing Street. Ms. Reeves stressed the challenges of governance in the UK and the importance of being prepared for unforeseen obstacles.
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