The scheme was due to close on January 2016 but a report on Sky News revealed that it is likely the Chancellor will extend the scheme for either one or two years.
When the FLS was launched on 13 July 2012, its objective was to incentivise banks and building societies to lend to households and businesses by making more funding available to them at a cheaper rate if they agreed to advance more loans in these areas.
The scheme was tapered back to only include lending to businesses in January 2014. Participants of the scheme can borrow £5 from the Bank of England for every £1 they advance in small business loans.
Sky News said discussions between Bank of England officials and the Treasury were likely to reach an agreement by Wednesday.