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Friday, 19 June 2009

A Drop In The Ocean

Last week Boris Johnson committed £3 million to help small businesses who have been refused a bank loan, but this a mere drop in the ocean considering the number of suitable applicants. Loans of up to £50,000 are being offered to businesses which have been unable to get necessary funding from the banks. The Federation of Small Businesses has pointed out that there are more than 700,000 small businesses in London and £3 million is simply not enough.

Boris Johnson says he appreciates the importance of small and medium businesses for the UK economy, image and employment and is doing everything he can to support them. This is clear from the interest rates on the loans of 6.8% if secured by property and 8.8% if not, the EU's lowest allowed rates. Nevertheless, the Mayor has been criticised for being slow to respond to a problem which has been around for some time now.

This fund will undoubtedly help many businesses across London; however it will not have the desired effect of reducing unemployment increases and bolstering the UK economy if more money is not made available as this pot runs out. Find out more from the
BBC article.

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