The chairman of the Wiltshire branch of the Federation of Small Businesses (FSB) has welcomed a decision by the Bank of England to launch an £80bn ‘funding for lending’ scheme that could make it easier for firms to apply for loans.

The emergency measures, announced by Sir Mervyn King earlier this month, aim to boost business lending by giving banks cut-price funds provided they pass on the benefits to business customers.

It is hoped this will help avoid a second slump in the economy since the credit crunch in 2007.

Wiltshire FSB chairman Ian Dyer welcomed the move, which he said could benefit smaller firms.

Mr Dyer said: “This is quite specific, as opposed to quantitative easing. This is actually for businesses. Although the banks can’t lend to everyone, there’s people out there with a really good track record in business and they’re having a job to borrow money.”

The move by the Bank of England follows hot on the heels of a survey by investment experts Skandia, who found that two out of five people (41 per cent) owe money on credit cards, with 50 per cent of 45 to 54-year-olds having money outstanding on plastic.

This age group (33 per cent) and 35 to 44-year-olds (32 per cent), are also the most likely to have a personal loan.

Mr Dyer said many firms in the small and medium enterprise (SME) sector had given up approaching high street banks for funding, and were looking to their peers for small cash loans.

“People are using different sources and borrowing privately,” he said. “They can lend relatively low sums of between £10,000 and £30,000 for a year or several years and get a slightly better rate of interest, so both sides are winners.

“There is a certain amount of risk but they are dealing with people they know, so it’s a calculated risk.

“I’ve had big borrowings myself over the years but now I just do everything out of cash flow. I’m still expanding the business, but I’m doing it out of the profits.”

The 52-year-old said that it would be SMEs rather than multi-nationals that would get the UK out of the current economic dip.

“Ninety-five per cent of businesses employ less than 10 people, and they are the ones that are going to get the country going again,” he added.

According to Skandia, although many people are taking advantage of borrowing money via credit cards, there’s resentment at having to pay them off. Asked which debts they are most unhappy about paying, credit card bills came top at 12 per cent, with just four per cent saying personal loans and one per cent hire purchase loans.

The research also found that the amount of savings needed to be happy has increased, with 64 per cent of people consulted in April saying savings of up to £5,000 would make them happy, compared to 82 per cent in 2010, a drop of 18 per cent.