Cameron said that SMEs were central to the economy as he unveiled a raft of measures designed to support SME growth, the centrepiece of which was the grant scheme, which is intended to unlock £500m of capital expenditure and create 4,000 jobs.
The grants will be distributed by the three banks on a pro-bono basis, with £70m being made available through RBS and Natwest and the rest via HSBC. The banks will not earn any fees for administering the scheme.
Companies applying for loans from the three lenders that fall short of having enough capital to access funding, will be directed to the pot by their lender for a top-up.
So a printer wanting to buy a £100,000 piece of equipment, offered a £70,000 loan but only able to contribute £10,000 itself, could access the remaining £20,000 through the grant.
The funding is only available for new machinery that will create new jobs or safeguard existing ones, not refinancing, and can only be awarded alongside an award of a bank loan, expected to be two to five times the size of the grant.
While the grant allows more wiggle room for companies that fall short of being able to provide enough capital to qualify for a loan, it will not be provided if the initial application was declined because the beneficiary has insufficient security to support the new debt.
David Nestor, managing director at PrintWeek SME of the Year First 4 Print Finishing, welcomed the move.
He said: "At the end of the day we need to get this country back on its feet and we are going to do that by creating employment, so any help from government has to be a good thing.
"There will be companies out there that need to invest to keep up with the market and if this gives them access to new machinery it can only be a good thing for them and their employees."
Gerry Hoare, director of print finance broker Deal Bureau, agreed that the scheme could be "very good" for the industry but warned that many business owners would still put off investing due to the economic uncertainty. "You have to question how many companies want to take on significant expenditure in the current climate," he added.
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