by business editor Trevor Sturgess

Small firms across the county have welcomed the Government’s proposed £1bn business bank, saying it should be “a good thing.”

Business Secretary Vince Cable is unveiling details about the scheme at the Liberal Democrat Party Conference in Brighton today.

It aims to give firms easier access to funding and plug the gap left by the reluctance of mainstream banks to step up their lending for small business expansion.

The Government is expected to give a £1bn commitment to the bank in the expectation that it will be more than matched by the private sector.

Roger House, chairman of the 6,500-member Federation of Small Business in Kent and Medway, said: “The small business bank is a good thing – we’ve been calling for this for a long time and we are delighted to see it finally get off the ground.

"The FSB believes the new bank will stimulate competition among the high street banks, in particular the so called Big Five.

"The move will also open the door to alternative lenders and create new ways for small businesses to get finance, such as credit unions.

"We are certain the newly-created bank will help boost confidence and deliver growth in the economy.”

A recent survey by the British Chambers of Commerce, which has hundreds of members in the county, found that six in 10 businesses (59%) would feel more confident in securing finance if Britain had a government-backed business bank or finance agency.

John Longworth, BCC director general, said: “We are pleased that ministers are heeding our call to create a business bank that goes well beyond a re-badging of existing schemes.

"The funding announced by Vince Cable is the first step in a journey toward a British Business Bank that enables new and growing companies to get access to capital in the same way that they do in Germany, South Korea, and the USA.“

However, some critics suggest the level of funding will be too low to stimulate the Government’s hoped-for growth in the small business sector.