UK banks have proposed creating a £1.5bn ‘business growth fund' to invest in small businesses.
According to reports, the fund would likely buy up to a 10% stake in the shares of companies with an annual turnover of £10m to £100m.
It should also make it easier for small businesses to borrow more money from the major institutions.
Chancellor George Osborne, in a joint statement with business secretary Vince Cable, said it was "an important first step" by the banks.
"We have been absolutely clear that banks need to improve the lending environment for small businesses," the statement read.
The report comes from the business finance taskforce, which was set up in the summer by six major UK lenders.
It follows government criticism of weak lending.
The taskforce's recommendations
Access to finance:
- £1.5bn business growth fund
- Support the government's enterprise finance guarantee scheme
- Syndicated loans for mid-sized borrowers
- Improve access to trade finance for small firms
- Explain other sources of finance to declined borrowers
- Ensure wholesale markets support lending capacity as the economy recovers
- 'Mentors' to provide free business support
- Minimum service levels for the smallest borrowers
- Banks to publish lending rules
- Appeals process for declined loan applicants
- 12 month lead time to discuss loan refinancings
- Regular independent survey of business lending
- Provide broader industry lending data
- Regional 'outreach' events to meet businesses
- Make information on loan products clearer
- New BBA website with useful links for borrowers
- "Round table" for top businessmen and bankers
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