Small and medium-sized business owners welcomed a cocktail of Budget measures to help ease credit availability and move away from reliance on the banks.
In an attempt to tackle firms' complaints about a dearth of investment cash, mid-cap firms were given up to £1bn of Government and private sector funding via the Business Finance Partnership. Public sector investment will be matched by institutional backers. Mr Osborne said the private sector's response had exceeded expectations, with 24 funds submitting proposals. The Government has shortlisted seven.
Dozens of young entrepreneurs will benefit from taxpayer-funded micro-finance loans as part of the Government's attempt to tackle the soaring unemployment rates of 16 to 24 year-olds. The Department of Business is setting up a pilot Youth Enterprise Loan Scheme, distributing some £10m in cheap loans to between 3,000 and 5,000 young entrepreneurs.
Adam Soliman, 24, founder of upmarket Charbrew Tea, said: "The Youth Investment Fund would be a great catalyst for increasing social mobility and giving young entrepreneurs the leg up they need to create their own businesses."
From next month, the limit individuals can contribute to the Enterprise Investment Scheme – giving 30 per cent tax relief on the backing of small firms – doubles to £1m. Very small companies will enjoy a new relief from April, with the Seed Investment Enterprise Scheme giving individuals the opportunity to claim up to 78 per cent tax relief on investments of up to £100,000 into firms with net assets below £200,000. Firms can raise £150,000 of backing each year. Firms may have more luck encouraging non-doms to invest in British businesses after Mr Osborne gave them the opportunity to bring unlimited money into the UK, tax-free,so long as they make a qualifying investment in a trading company.
A Government-backed task force had warned last week that businesses will face a £190bn funding gap in five years unless more is done to stimulate alternative forms of lending.