The Government yesterday welcomed and accepted recommendations designed to maximize the support the Small Firms Loan Guarantee (SFLG) offers to small firms.

Key recommendations of Teresa Graham's revirew team include expanding lending limits to £250,000 per business, reducing bureaucracy surrounding the scheme, and raising the turnover limit to £5.6 million for all eligible businesses.

Chancellor of the Exchequer Gordon Brown said: "Small businesses are the lifeblood of our economy - boosting productivity, creating employment and prosperity, and revitalising our communities.

"Access to finance is a vital ingredient in the growth of any successful business. Our ambition as a Government is to take action to ensure that talented entrepreneurs can get the finance they need to convert their ideas and creativity into thriving businesses.

Teresa Graham's recommendations will ensure the future SFLG will maximize its impact on our enterprise agenda and helping those SMEs with greatest difficulty in accessing debt finance.

I welcome the review's recommendations and can today commit the Government to the implementation of her proposals in full."

The DTI run scheme has guaranteed over £3.8bn worth of lending to around 88,000 businesses over the last 22 years.