Funding expected to create at least 4,000 jobs and unlock around £500 million of new investment by small and medium-sized businesses (SMEs) has been announced by the Prime Minister, David Cameron. Hundreds of small businesses will benefit from government investment of £95 million to help boost growth and rebalance the economy.
The £95 million is part of the Government's Regional Growth Fund, which is a £1.4 billion fund supporting projects that can create jobs, are based in areas dependent on the public sector and are supported by private sector investment. The Fund has been primarily targeted at larger firms, with a minimum grant threshold of £1 million.
RBS, NatWest and HSBC have agreed to facilitate the distribution of the £95 million. RBS and NatWest will facilitate £70 million and HSBC will facilitate £25 million. The banks will not profit financially from the administration of these schemes.
The new schemes will provide grants to support SMEs considering investing in new capital assets and creating new employment.
The key features of the RBS, NatWest and HSBC schemes are as follows:
* The RBS and NatWest scheme is called the Regional Growth Fund and will distribute £70 million; the HSBC scheme is called the Assisted Asset Purchase Scheme and will distribute £25 million.
* The funding will support new job-creating investment by SMEs across England, in particular parts that have become over-dependent on the public sector.
* 100% of the Regional Growth Fund funding will be provided as grants to SMEs with the banks employing their regional networks to administer the schemes on a pro-bono basis.
* SMEs can qualify for a grant if they are going to invest in new capital assets, such as plant and machinery, and create new jobs - and cannot get normal bank finance.
* Grants of up to £500,000 will be awarded alongside the award of a new bank loan on commercial terms.
* To qualify for the NatWest and RBS scheme, SMEs need a turnover of less than £25 million.
* To qualify for the HSBC scheme the SME will need a turnover of less than 50 million Euros.
* The banks will not earn any fees to administer the scheme. Interest earned on any funds held on the bank's balance sheet must be used for beneficiary grants or returned to the Government.
Business Minister Mark Prisk said: "These schemes will directly help SMEs that want to invest and create new jobs. They will deliver a shot in the arm to local communities and help small businesses drive local growth.
"100 per cent of the RGF funding will be provided as grants to small businesses with the banks employing their regional networks to administer the schemes for free."
For Further information see the Department for Business, Innovation and Skills website.