LOCAL enterprises are cautiously welcoming Vince Cable’s plans for a new British Business Bank, backed by £1billion of Government money.

That is according to Barry Potter, a partner at Basing View-based chartered accountants Haines Watts.

Barry said: “This could help to get funds flowing to cash-strapped SMEs, but the devil will be in the detail.”

The scheme aims to help SMEs who cannot get the loans they need to expand.

The planned bank will have some functions in operation by the spring, and will be fully operational by late 2014. It is hoped it will be underwritten by a further £1bn of private sector money and be able to support £10bn of lending when operational.

The new bank’s cash will not be channelled directly to companies but through other challenger banks – although further details are needed on exactly how the new business bank will partner with existing banks and other lenders.

Barry said: “It will be great if this works – but it will need to be easy to apply for and straightforward if it is to help many SMEs. In the short term, more needs to be done on lending to SMEs.”