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Government announces supply chain boost for SMEs

Prime Minister David Cameron has announced a multi-billion pound boost for the UK supply chain, following an agreement by some of the UK’s leading companies to commit to a Supply Chain Finance scheme.

Supply Chain Finance aims to support small and medium-sized businesses in gaining access to affordable finance.

Under the scheme, when a large business approves an invoice for payment, it notifies the relevant bank. The knowledge that the invoice will be paid then allows the bank to offer an immediate 100% loan to the supplier, at a lower rate of interest.

Some of the UK’s largest companies have committed to the scheme, which it is hoped could deliver up to £20bn of new finance to their suppliers.

The Government is also set to introduce the first UK Government Supply Chain Finance scheme for its own suppliers, in the form of a new scheme for community pharmacies.

Mr Cameron said, ‘In the current climate, viable businesses can struggle to get the finance they need to grow - this scheme will not only help them secure finance and support cash flow, but will help secure supply chains for some of our biggest companies and protect thousands of jobs’.

The Federation of Small Business and Confederation of British Industry have both welcomed the scheme.