Small Firms Finance Scheme not far-reaching, as East of England businesses are amongst those benefiting least from the scheme aimed towards giving small firms access to the finance they need.
The Enterprise Finance Guarantee (EFG), introduced in 2009 in response to the credit crunch, sees the Treasury act as a guarantor on 75pc of individual bank loans between £1000 and £1m too small and medium-sized firms finding it hard to access a commercial loan.
But a report carried out by academics for the Department for Business, Innovation and Skills (BIS) showed firms in the East had not participated as much as other areas.
In the Eastern region, 14.7 firms in every 10,000 had gained finance through EFG, compared to 17 in the West Midlands, 16.8 in the East Midlands, 16.6 in the South East, 16.4 in the North East and 16 in the North West.
Firms in Wales and Scotland also received finance through the EFG more than businesses in the East. Meanwhile, companies in Yorkshire, the South East and London used the initiative less.
Chris Starkie is a programme manager at the New Anglia Local Enterprise Partnership, a grouping of council and business leaders from East Anglia.
He said: “We are encouraging businesses to challenge the banks to ask them for finance and also not to assume that they are going to say ‘no’.
“Ensuring business can access finance is an important priority for us, that’s why next month we’ll be launching our business growth fund that will provide grant finance for expanding firms.”
The BIS study suggested EFG added £1.1bn to the UK economy overall, and that for every £1 invested it had helped deliver £33.50 in output.
Meanwhile, the researchers, from the University of Durham, argued it had created 6,500 jobs and safeguarded more than 12,000 across the UK.
They suggested lower rates of participation in the East could be because it was more prosperous are with businesses having better access to conventional bank lending.
But business minister Michael Fallon admitted further pressure needed to be exerted to ensure the initiative performed well in all areas.
He said: “Clearly the demand is there for this type of financial support so we must start to see an increase in take-up.
“I have already begun publishing EFG lending by each bank because businesses should know which bank they are best off approaching and I will continue holding the banks to account until lending levels improve.”