Treasury seen mulling small business scheme

Mon Jan 12, 2009 11:08pm GMT

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LONDON (Reuters) - Ministers are considering plans to guarantee up to 20 billion pounds of loans to small businesses to help them survive the downturn, the BBC says it has learnt.

The BBC's political editor, Nick Robinson, said on Monday the scheme, designed to address the severe lack of credit, could be announced on Wednesday.

The BBC said that under the scheme, the state would effectively insure banks against firms defaulting on their loan payments in return for a fee.

A spokesman for the Department for Business, Enterprise and Regulatory Reform said that the government hoped to make an announcement on Wednesday over its plans to support small and medium sized business, but could not confirm the actual figures.

(Reporting by Ben Deighton; Editing by Phil Berlowitz)

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