Council loans to help small firms

The council is prepared to make loans on more flexible terms than banks

Scotland's largest council is to offer loans to small businesses which have been affected by the economic downturn.

Glasgow City Council is prepared to lend money at lower rates than banks, and with more flexible terms.

It is part of a package of measures designed to help the city weather an expected recession.

Other initiatives include a "build now, pay later" scheme for developers, and the creation of a £36m "Better Glasgow Fund" to pay for regeneration projects.

An economic advisory board, comprising high-profile entrepreneurs Sir Tom Hunter, Willie Haughey, Jim McColl and Akmal Khushi, will offer guidance to the city council on future initiatives.

The authority said it was prepared to offer "more flexibility" in its land disposal policy to make it easier for projects to get off the ground.

This would allow the deferral of payments companies have to make to develop sites.

There will also be greater flexibility in the way the council allocates grants for social housing.

It has also promised free parking in all council and Strathclyde Partnership for Transport park-and-ride car parks on the last Sunday before Christmas.

Sir Tom Hunter will offer advice to Glasgow City Council

The measures were announced by Council Leader Steven Purcell at a "State of the City Economy Conference" on Tuesday.

"This is not a time for any of us to retreat into our bunkers - whether it's public agencies or private commerce, we must stick together and do what is right for our city," he said.

"Because of the effects of the credit crunch, businesses, and small businesses in particular, are struggling to find borrowing facilities on suitable terms.

"The council will lend them money at rates lower than anything small businesses can get to support them through these difficult times.

"We will look at a business' individual circumstances, and where possible we will offer services like repayment holidays and flexible interest rates appropriate to how the business is performing."

Mr Purcell said that the authority could, in some cases, look at taking an equity stake in a company in return for funding.

He also said the council would look at borrowing money from the European Investment Bank to lend to developers for regeneration projects.

These measures, he said, would "play a significant part in getting Glasgow through this".

Delegates at the conference were told that major projects already in the pipeline for Glasgow, such as the Commonwealth Games and M74 extension, would still go ahead.