A new bank has been launched today that aims to loan £250m to small and medium-sized companies in 2012. The launch of Shawbrook Bank comes as the Treasury reportedly looks at creating a scheme to allow banks to lend Government money. Shawbrook, which is backed financially in part by RBS Equity Finance, is chaired by Sir George Mathewson, who ran Royal Bank of Scotland until 2006. It joins other new British banks such as Aldermore and Metro Bank that have emerged since the banking crisis at the end of the last decade. The Forum for Private Business gave a cautious welcome to the new bank. “The bank represents a new source of finance for small firms and that is certainly a positive development,” said campaigns manager Jane Bennett. “But it has to be put into perspective. Shawbrook’s model is lending against the value of a property, a form of asset finance rather than a return to the strong relationship banking that we want to be the bedrock of commercial finance in the UK. “While a target of lending £250m per year is not huge, the funding that will be available via the new bank should not be dismissed out of hand. “However, there is a great deal of work still to be done to improve competition in order address the over-centralised, tick-box nature of today’s banking system, and to restore local decision making powers to branch managers who truly know the businesses in their areas.” City AM reports today that the Treasury is urged to consider a radical scheme that would see it give public money to banks to lend to small businesses at below current market prices. Under the plan, which has reportedly been raised in meetings of ministers and bankers, the Treasury would redirect some of the cash it deposits to the Bank of England and bigger lenders into loans or deposits for smaller banks, which would commit to lending to small and medium companies. Business Secretary Vince Cable told the newspaper it was a “creative idea that we should certainly look at”.