George Osborne is set to boost lending for SMEs as the government seek to push economic growth, with an extension to the Funding for Lending Scheme (FLS) run by the Bank of England.

The FLS scheme has so far be credited with reducing mortgage costs for small businesses with the Chancellor admitting that an extension may have “merit”.

The scheme established in August was originally set to expire in January 2014, but is now expected to be extended after the IMF have raised concern regarding the UK’s efforts to promote growth and current austerity measures, with another major credit ratings agency downgrading the country from triple-A last Friday.

Expectations are on a FLS extension being announced before the arrival of an IMF delegation in May

UK prepares for 2013 budget

Government increases business innovation fund to £60 million