Originally announced in November 2011, The National Loan Guarantee Scheme (NLGS) was launched today and is aimed at  helping businesses access cheaper finance by reducing the cost of bank loans by 1 percentage point.

In order to benefit from this scheme, businesses must have a turnover of not more than £50 million and can only apply for loans at a participating bank (not all banks are in the scheme).

The discounted loans are being made available because the government is guaranteeing £20bn of the banks’  borrowing, allowing them to borrow more cheaply than they do normally, with the banks then passing on this cheaper funding to SMEs in the form of lower interest rates

You can find more details on the Treasury website