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The Government has reduced the guarantee it provides high street banks ready system in small businesses 700 m ￡, allowing smaller banks, use of creosote learned members.

Peter Ibbetson, President of small business, Royal Bank of Scotland/NatWest revealed the reduction under interrogation today by the Select Committee of business in the Commons.

Mr. Ibbetson said the cap on the exposure of the State to liability under the guarantee of financial Enterprise (EAP) was reduced by 9 75pc 9 225pc.

He said that increased exposure of the Bank to potential liabilities under the plan would "effect" the ability of smaller banks to use it, even if RBS is not affecté.RBS approves loans in the scheme with Lloyd 41pc's second busiest 31pc.Il Bank has 25 other lenders licensed, including Barclay, HSBC and Santander.

Mr. Ibbetson added that the ceiling was limiting the use of the prepared plan seen by Government as essential to ensure that small businesses with little assets as security can obtain financing.

"The removal of the CAP can enable small banks use the schema", he said.

Affairs Department said change had been made in expenditure Review of Treasury Board and take effect next March.

However, a spokesman said that the liability limit was be cut for banks, raised to 15pc for lenders as community development finance institutions that provide less than 1 m ￡ loans per year to encourage them to lend more.

"We watched where there are problems in terms of what do small lenders and some of them do not use their allocations complets.Pour encourage them we give them a boost," he said.

Mr. Ibbetson warned MEPs that new UK and settlement Bank international would increase the cost of funds for small business as the economy recovered.He said RBS met the requirements of equity system existing in the Financial Services Authority and the proposed Basel III rules and that the access to capital is not a problem.But he says companies should prepare for higher loan prices.

"We do not have a constraint on how we can lend but there is a co?t.Accès funding will be affected, but it just say there will be a cost involved", he said.

Angela Knight, Executive Director of the British Bankers Association said that the larger the United Kingdom corporate finance market did not work correctly.

Ms. Knight said: "We are very clear that there is a number of areas in the operation of the wholesale markets now who will act as a barrier to release funding for the takeover".

However, Mr. Ibbetson said that RBS had the intention of the provision more turnover funds next year as the economy recovers and businesses require additional facilities to support this growth. ""I want to give you this assurance that financing will be there," he told MEPs.

CGE scheme will receive 600 m ￡ funding year prochaine.Pour a bonus point 2pc standard commercial loan bank guarantees 75pc of all passive system arising from the loan individuel.Le ceiling limits exposure State commitments in a store (CGE) loan portfolio.

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