The legal sector has given a tepid welcome to the £20bn low-interest loan scheme announced by the chancellor in the runup to this week’s budget.

William Arthur, consultant at professional services consultancy Kerma Partners, said: ‘There is no sense of a pent-up and unsatisfied demand for funding in the legal sector that the banks are not meeting. However, there is some consolidation happening in the market, with the emphasis on acquisitions, and firms may increasingly welcome access to more funding at lower interest rates.’

Andrew Otterburn of Otterburn Legal Consulting said: ‘Banks are rarely reluctant to lend to firms with a good business plan, clear strategy and strong management team. This cut in interest rates rewards their diligence and is a step in the right direction to aid economic recovery.’

The government’s National Loan Guarantee Scheme (NLGS) aims to increase bank lending to small and medium-sized businesses by guaranteeing £20bn of the banks’ own borrowing. This will allow banks to borrow more cheaply than usual and pass on the savings in the form of interest rates that are one percentage point lower than the norm. Firms with turnovers of up to £50m are eligible for the scheme.

Barclays, Santander, Lloyds, Royal Bank of Scotland and new market entrant Aldermore have so far signed up to the scheme.

Consultancy 360 Legal Group managing director Viv Williams said: ‘The new scheme is not a nirvana to solve all the profession’s ills. It’s just more of the same old story - if a firm was good enough to lend to before the NLGS, then it is good enough to lend to after it. Lending has flat-lined over the last two years and it is not about to change now.’