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Help for small businesses outlined

Help for small businesses outlined

Category: Business

Updated: 04/04/2011
First Published: 01/11/2010

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A number of initiatives to help the UK's five million small firms have been unveiled by the Government.

It is hoped that the cross party range of measures will help small firms to access finance, make it easier for them to carry out business with the public sector, and allow social tenants to start up businesses from their homes.

Small businesses account for six in ten jobs and contribute half of the UK's GDP.

However, despite two thirds of them having ambitions to grow within two to three years, just 20% expand their workforce each year.

Small and medium (SME) sized enterprises have consistently cited a lack of available finance as one of their main problems, but the Government has reaffirmed its commitment to providing a wide range of options.

It has said it will continue the successful Enterprise Finance Guarantee for the next four years, making around £2 billion available to small companies without a credit history or collateral, with 6,000 companies a year to benefit.

The Government is also to work with the banks on several areas to promote funding for SMEs.

In addition, small businesses will also be able to maximise opportunities through the wider public sector, with a goal of awarding a quarter of Government contracts to SMEs.

"We will work with departments to ensure they are fulfilling this aim and expect them to increase their rate of SME procurement each year," said the Department for Business, Innovation and Skills.

Efforts will also be made to allow social tenants to start up businesses in their own homes, with barriers removed and work carried out with landlords to encourage the development of entrepreneurial skills.

"Of course, councils and housing associations must consider the possible impact on neighbours that a new company in the area could make," said Grant Shapps, Housing Minister.

"But I urge them to use their common sense and, where a tenant is making a reasonable request to start their career at home, that it be granted."

Jobcentre plus will also run a campaign so that its advisers can guide people looking for work and are interested in establishing their own company

"These measures will ensure stable financial conditions for business, a more competitive and transparent banking system and access to a more diverse range of sources of finance that suits their needs," said George Osborne, Chancellor of the Exchequer.

"The private sector is also taking steps to provide a diverse range of finance options for businesses - a development which is welcomed by Government."

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