In the current economic climate it is more important than ever to ensure that you are doing everything possible to increase your company's access to finance.

The European Investment Bank set up a €15bn fund in September, that the first UK banks signed up to in January, with the sole purpose of lending money to small and medium-sized firms at a discounted rate over the full term of the deal.

UK Banks signed up for the EIB's scheme include; The Royal Bank of Scotland/Natwest, Barclays Bank, Close Brothers, and most recently, Abbey. RBS is borrowing 250m, Barclays 150m and HBOS secured a 250m loan to lend to UK SMEs.

Any small and medium-sized business that employ less than 250 staff and have a viable business plan can apply to any of these banks for access to the EIB loan.

The loan can be for tangible (such as the purchase of real estate) intangible (for example, financing for research and development), or to increase a businesses working capital. EIB finance can be obtained for loans of a maximum of 12 years, and the most money that can be borrowed per loan is €12.5m.

Any small and medium-sized business that employ less than 250 staff and have a viable business plan can apply to any of these banks for access to the EIB loan.
The EIB has set aside a further €15bn to lend to SMEs in 2010 and 2011. UK bank take up of EIB funds has risen from only €100m in 2007 to over €900m last year, and this figure is expected to increase in 2009.

"We will increase lending by over €15bn - almost 30% - in both 2009 and 2010 to help address the credit crunch; loans for SMEs will form an integral part of our extended future offering," said Simon Brooks, EIB Vice President responsible for lending activities in the UK.

Santander, the owners of Abbey and Alliance & Leicester, have recently announced that Abbey will provide over £100m of lending to small and medium-sized businesses through the scheme.

"This is a strong signal that we are open for business and keen to support the SME sector in the UK," said Steve Pateman, Managing Director of UK Corporate and Commercial Banking for Santander.

The Federation of Small Businesses (FSB) has urged banks to sign up for the scheme and warned that small business owners must be proactive in approaching their banks.

"While there have been efforts to restore lending to small businesses and some enterprises are being granted finance, the FSB is still hearing negative reports about banks holding back funds from viable small businesses," said FSB National Chairman John Wright.

"With 120 businesses going bust a day, business owners do not have the time to wait for letters or phone call centres to enquire about finance. Banks must train their staff to have knowledge of our sector and be on hand to deal with small business customers on a day-to-day basis."

With gaining access to funds proving to be one the biggest obstacles faced by small and medium-sized companies, it is clear that to access new finance small business owners must be aware of the different schemes available, and be proactive and approach their banks.