Pierre Williams from the Federation of Small Businesses told ITV News that if the Funding for Lending Scheme fails, the Government will have to "look carefully" at whether high street banks are the 'right conduit'.
The £80 billion scheme will give money to banks on the basis that they provide cheaper loans to kick-start lending.
Shadow Treasury Minister Chris Leslie told ITV News that the Bank of England's new Funding for Lending Scheme did not give much "confidence" in the economy, after the Chancellor set up the £80 billion initiative to kick-start lending.
The Confederation of British Industry (CBI) commented on an announcement by the Treasury that the Funding for Lending Scheme is now up and running.
The £80 billion scheme will make money available to banks on the condition they provide cheaper loans and mortgages to first time buyers and small businesses. CBI's director-general John Cridland said the initiative is "broader" than the previous loan scheme:
This scheme should support banks to make finance more affordable to businesses and consumers, while also encouraging banks to lend more.
The Funding for Lending Scheme is likely to naturally replace the National Loan Guarantee Scheme overtime because it is a bigger scheme that is open to a broader range of firms.
Treasury Minister Mark Hoban told ITV News that the £80 billion Funding for Lending Scheme will be a "welcome boost" to the economy, with the plan of "encouraging" small businesses and first-time buyers to invest in loans and mortgages.
The British Banker's Association has said today that they are "committed" to the Treasury's new £80 billion Funding for Lending Scheme, which was put into action today. The BBA said:
The UK's lending market is very competitive - and with support through schemes like the FLS for even lower cost borrowing, now is a very good time for UK businesses and individuals to speak to a bank about their financing needs.
The scheme is open to all banks and building societies and should act as a driver for competition, which should benefit both consumers and businesses.
Treasury minister Mark Hoban told BBC Radio 4's Today programme that the Bank of England and Treasury's Funding for Lending scheme (FLS) would "benefit more businesses and households".
Mr Hoban said: "The National Loan Guarantee Scheme is aimed at small and medium-sized businesses - we want to broaden it out. The National Loan Guarantee Scheme is still available. It is still there if banks want to draw upon it.
"What we believe will happen is that banks will seek to use the Funding for Lending scheme to offer mortgages to households and channel lending to business customers."
The director of the National Institute of Economic and Social Research, Jonathan Portes has said today there is a "lack of confidence" in investing ahead of the government's Funding for Lending Scheme. Mr Portes told BBC Radio 4's Today programme:
In general terms, it is good that the Government is doing something to try to restart lending to the real economy. What concerns me is that this is replacing a scheme that hasn't worked.
We have had a number of these schemes and I think there is still considerable concern that the role of the banking system in doing its fundamental job of channelling people's savings into the real economy just isn't working.
House prices have recorded their biggest year-on-year decline in almost three years amid the toughening economy, Nationwide building society said today.
But the market has shown "resilience" compared with some other countries, despite the 2.6% annual drop taking average prices to £164,389 in July, Nationwide added.
The study said the Bank of England's new "funding for lending" scheme could give a boost to the housing market, but with the eurozone crisis continuing, Nationwide expects to see only a "modest recovery" in the coming months.
Labour has claimed that the Government’s replacement of the National Loan Guarantee Scheme with a new Funding for Lending initiative, allowing larger businesses to also take part would be a further blow to Chancellor George Osborne.
The £80 billion initiative to kick-start lending was fired into action today, making money available to banks on the condition they pass it on to businesses and households. Shadow Treasury Minister Chris Leslie said:
If the National Loan Guarantee Scheme was always supposed to be replaced by the new Funding for Lending scheme, then why, two weeks after that new scheme was announced, did George Osborne say that the NLGS would be extended?