Treasury considering injecting cash into medium-sized businesses

cash injection

The Treasury is considering injecting cash into medium-sized businesses to provide them with longer-term support than they receive from loans. The Times (£, p34) says the plan could be executed through the Business Growth Fund and would be similar to the way in which 3i was used after the Second World War to help small and medium-sized businesses that could not raise equity in public markets.

According to City AM, a top City figure has been approached by the government to assemble a so-called “bailout taskforce” that would put funds into businesses in exchange for equity stakes. The Telegraph (£, online only), reports that the leader of the group is expected to bring in a team from top investment banks and be “ready to sit down and do deals”.

Separately, the Treasury is considering proposals on how best to support start-ups to ensure Britain’s most innovative businesses survive the crisis (Financial Times, £, p3). Some start-ups are lossmaking and are therefore not eligible for the new government-backed loan scheme for small companies.