The government is planning to give its newly created Business Bank a £250m boost, and a permanent headquarters in Sheffield.
The plan, designed to underline the government’s commitment to small businesses across the country, will see the bank move to Nick Clegg’s south Yorkshire constituency.
Clegg is to unveil the plans with business secretary Vince Cable at an event in London today. The additional £250m of funding will take the bank’s lending potential up to £1.25bn, and will help fix a “big long-term problem in our banking system”, Cable will say.
The bank, which was set up last year, aims to help provide investment for small businesses struggling to gain finance from traditional high-street lenders. Chancellor George Osborne pledged to provide around £1bn in funding, but the bank has been criticised for being under-funded and weak.
According to the Telegraph, Cable is expected to say that the bank is “a new long-term institution which is helping to create more competition in the banking sector and give access to finance to businesses who are currently struggling with high street banks”.
He will add: “Since I announced this initiative more than 10,000 businesses have already been helped and this new money will help it do more of that. The British Business Bank is fixing a big long- term problem in our banking system and it is set to unlock up to £10bn of finance over the next five years to help small and medium sized businesses grow.”