A YORK councillor has welcomed the Government's indication that it will continue to extend the provision of its Small Firms Loan Guarantee Scheme.

Coun Paul Blanchard, who is self-employed, outlined how this will help small businesses in the region.

He said: "Many small and medium-sized enterprises with good business plans are refused a loan, since they lack collateral upon which the debt can be secured.

"This scheme helps businesses to start up and grow by providing a 75 per cent government loan guarantee to the bank, allowing the loan to go ahead."

City of York Council helped Coun Blanchard start his own business, at that time York Software Services, nearly ten years ago, when he was given assistance by the council-run Young Business Project in Fishergate, in the form of subsidised offices and know-how.

He is now managing partner of York business development consultancy Right Angles, and is chairman of the York Area Board of the national business-education charity Young Enterprise.

This month, the Government welcomed and accepted recommendations on the future of the Small Firms Loan Guarantee (SFLG), designed to maximise the support that the scheme offers to small firms.

Key recommendations include:

Expanding lending limits from £100,000 to £250,000 per business - getting more money to those businesses that need it most

Reducing bureaucracy and regulation surrounding the scheme - removing much of the administrative burden on lenders will cut the time taken on making decisions

Raising the turnover limit to £5.6 million for all eligible businesses - allowing more younger, high growth to access SFLGs, and

Limiting the age limit of eligible businesses to three years - so more money can go to the young businesses that need it most rather than older businesses that are more likely to have other financing options available.

Coun Blanchard, a member of the Labour Party's finance and industry group, said: "Small businesses are the lifeblood for our economy - boosting productivity, creating employment and prosperity, and revitalising our communities.

"Access to finance is a vital ingredient in the growth of any successful business."

Updated: 09:24 Tuesday, November 02, 2004