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Business lending scheme expanded

Investment in a lending scheme aimed at boosting exports is to be doubled to £3 billion under a raft of measures to help business drive economic recovery.

The Chancellor said exports were increasing, but he wanted to spread the Made in Britain mark across the world.

UK Export Finance will expand its direct lending programme and cut interest rates to provide competitive financing for firms bidding to win overseas contracts.

Trade and Investment Minister Lord Livingston said: "The Government is working hard to help UK companies boost their exports. That's why we are doubling the size of the UK Export Finance Direct Lending Scheme to £3 billion and launching a consultation to change legislation to allow us to better meet the needs of small businesses exporting."

The Government also announced that the new Business Bank has designed a guarantee scheme to promote greater lending to small and medium sized companies (SMEs).

Business Secretary Vince Cable said: "The shadow of the credit crunch still looms large and too many small and medium-sized businesses are still not able to get the finance they need to grow. The Business Bank is already supporting lending through alternative providers, but the banks dominate the market and this pilot is looking at new ways that we can stimulate bank lending.

"In the longer term, if we're to fix this problem, we need our SME lending market to be less concentrated in a few banks, with more diverse sources of finance for businesses."

Other business measures in the Budget included an increase to £500,000 in the allowance for investing in plant and machinery, and changes to research and development tax credits.

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