The Government is about to announce a new scheme to encourage banks to lend to business, through a National Loan Guarantee scheme.

Initially £20 billion has been set aside to guarantee loans that banks are making, the idea being to encourage banks to make funding more readily available. This should result in the lowering of borrowing rates to business as the risk element of lending from the bank's point of view, is eliminated.

This sum could be doubled to £40 billion if need be, within a two year period and should be in force at the start of the new year.

This initiative will be part of George Osborne's autumn statement  on Tuesday.