Government deal to help developers
Monday, 19th January 2009 at 11:55 am
Counter-credit crunch measures could aid struggling studios
Lord Mandelson, the secretary of state for the Department of Business, Enterprise and Regulatory Reform has unveiled several new measures to help the cash-flow, credit and investment needs of small business.
The new offering includes loan guarantees and an Enterprise Fund designed to help companies that need to access finance for working capital and investment.
“Managing cash flow is crucially important for all businesses,” said Tiga’s CEO Richard Wilson. “Many games developers use bank finance to help fund their operations. Measures to promote the availability of credit, if effective, will be supported by the industry.
“Tiga will monitor the effectiveness of both the Government’s and the Bank of England’s counter-recessionary policies in the months ahead. The Government will almost certainly need to take further measures to increase the availability of credit and strengthen the banks.”
The Government’s measures include a £10 billion Working Capital Scheme, securing up to £20 billion of short term bank lending to companies with a turnover of up to £500 million, as well as an Enterprise Finance Guarantee Scheme, securing additional bank loans of up to £1.3 billion for small firms with a turnover of up to £25 million.
Additionally, the Enterprise Fund provides £75 million in capital, sourcing £50 million from Government augmented by £25 million from the banks, to invest in small businesses which need equity.
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