Businesses should find it easier and cheaper to secure loans after a government announcement that it is cutting the fees that it charges to guarantee bank borrowing.

For some of the largest UK banks the cut will amount to a quarter of a percentage point. It is thought that HSBOS will be the largest banking beneficiary - it could see its fees reduced by 41 basis points.

Banks should be able to pass on the cuts immediately to their customers, as the government's move has a direct impact on their cost of funding.

"This is extremely important and everything counts. This will make the scheme less expensive for many banks who are using it," said Angela Knight, chief executive of the British Bankers Association.