THE Government yesterday unveiled a multi-billion-pound package of measures aimed at unblocking lending to small firms, including loan guarantees and a new enterprise fund to help companies struggling to access finance.

Business Secretary Lord Mandelson said it was “crucial” that the Government acted now to provide help, amid warnings that scores of smaller businesses were going bust every day.

The measures include a £10bn working capital scheme, securing up to £20bn of short-term bank lending to companies with a turnover of up to £500m.

The enterprise fund will be worth £75m, made up of £50m from the Government and the rest from banks, and will be available for small firms which urgently need equity.

The Government also announced an enterprise finance guarantee scheme, securing up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m.

Jack Stopforth, chief executive of Liverpool Chamber of Commerce, welcomed the move, but said it was now up to the banks to make the proposals work.

He said: “Mandelson talks about £20bn, but half of that is coming from the banks, so we need them to have a change of heart about lending to firms if the scheme is to work.”

The Federation of Small Businesses welcomed the announcements, but warned it was a “last throw of the dice” to unblock lending to small and medium-sized enterprises. Lord Mandelson said: “UK companies are the lifeblood of the economy.

“We know that some companies are struggling to secure the finance they need, not because of any failure in their business, but due to the tougher conditions.”

Shadow chancellor George Osborne said the Government appeared to be offering a belated version of the £50bn loans guarantee scheme floated by the Tories several weeks ago.

“Let us hope that they will properly implement this Conservative policy rather than a pale imitation, or else they run the risk of repeating the mistakes of their expensive temporary VAT cut and achieving nothing,” he said.

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