What is the Working Capital Scheme?

The Working Capital Scheme run by the Department of Business and introduced by Lord Mandelson in January 2009 was an attempt by government to boost the amount of credit available to small businesses.

Essentially, the government provided banks with guarantees covering 50% of the risk on existing and new working capital portfolios up to £20bn.

The first £1bn tranche of the scheme was due to be launched by 1 March to support about £2bn of loans for companies with a turnover up to £500m.

All the main banks are taking part in the scheme.