Government to offer help to small businesses

LONDON (Reuters) - Chancellor Alistair Darling will unveil measures next week to help small businesses cope with the toughest economic conditions since the 1930s, the Financial Times reported on Thursday.

He will underwrite new loans to small firms and extend taxpayer guarantees to bank lending to smaller companies, which amounted to 5.7 billion pounds in the year to June, the report said.

A Treasury spokesman declined to comment on the report and said government spending plans would be laid out in Darling's pre-budget report to parliament on November 24.

Darling is also expected to announce an increase in funding for a scheme that allows small companies to apply for bank loans that carry a 75 percent taxpayer guarantee, the FT added.

The Federation of Small Business said wider access to an existing 360 million pound small firms loan guarantee scheme would be "massively helpful."

Prime Minister Gordon Brown has come under pressure to do more to help the country's 4.7 million small businesses struggling to cope with the fallout from the financial crisis.

He has said he is prepared to borrow more to give the economy a boost. Trade-weighted sterling has hit record lows against the euro this month, while house prices have fallen and unemployment has risen.

He met a group of small business executives on Thursday morning as part of a series of meetings to discuss their concerns.

"Clearly we recognise that some small and medium-sized businesses are facing tough times," Brown's spokesman said.