Chancellor George Osborne has launched a £20 billion lending scheme for small and medium-sized enterprises (SMEs).

It is hoped that the scheme will kick-start a private sector recovery to fill the gap in demand left by the government cuts.

John Walker, national chairman of the Federation of Small Businesses (FSB), said: "Recent FSB research indicated that around 60% of small firms believed that credit is unaffordable and so this scheme should help reduce that burden."

The British Chambers of Commerce (BCC) has welcomed the credit easing scheme.