Thousands of pounds of funding could be ploughed into Powys companies in a bid to stop them going out of business.

Powys County Council intends to allocate £76,000 to support businesses with “hardship” rate relief during the recession – with a further £276,000 coming from the Welsh Assembly.

Members say it will help prevent many firms from going out of business and save hundreds of jobs. Councillors are being urged to back the cash when they meet next week.

A further £276,000 would then come from the Welsh Assembly Government, giving a relief fund of £352,000.

Councillor Gwilym Evans, portfolio holder for finance, said the money would help save “many” businesses from closure.

He said: “The report recommends the council helps save local jobs by using uncommitted funds from the Local Authority Business Growth Initiative (LABGI) scheme, an economic regeneration fund.

“As the recession deepens, the council is receiving hardship applications from major employers in the area.

“These are often connected with the motor trade which has been particularly badly affected, with the main manufacturers either cutting down or suspending production.”

He said applications were also being received from other businesses suffering because of the financial downturn.

He said: “These firms are asking for short-term help to avoid them going out of business with, in some cases, the possible loss of many jobs.

“The cost to the council of granting hardship relief is 25 per cent of the amount allowed, with the remaining 75 per cent coming from the Welsh Assembly Government.

“If we agree to allocate this money, the general guidance will be amended to target the relief of those businesses where local jobs will be saved and the closure of the businesses prevented, or, at worse, delayed.”

He said all businesses would need to go through an application process “to satisfy the council it has a reasonable survival plan to get it through the recession”.

By Anwen Evans