SMEs’ credit still frozen amid confusion over government guarantees

Lord Mandelson

Lord Mandelson

SMEs are struggling to access credit despite business secretary Lord
Mandelson’s multi-billion package to unblock the credit market, according to an
association of accounting firms.

The government’s enterprise finance guarantee, announced last week, will
underwrite 75% of a bank loan made to companies with a turnover of up to £25m.

But Kevin Dickens, president of the UK200 Group, which represents 120 UK
accounting firms, said some high street banks were unaware how to apply for the

He said banks had told him the packages will not be available until the end
of February. This could result in businesses going bust and make it harder for
accountants to help clients get credit.

‘The infrastructure is lacking behind the grandiose statements. I have been
trying to work with banks to find out the details of the scheme,’ he said.

’Mandelson said last week the money is available but I went to the banks to
ask for lending for very secure clients of mine but the banks don’t seem to have
the money, the method to lend or knowledge of the schemes,’ Dickens added.

A spokesman for the Department for Business, Enterprise & Regulatory
Reform said the money guaranteed by the measures has been available since 14
January ­ the day of the announcement.

Related reading