Banks and Businesses Should Find Common Ground to Boost Lending

Banks and small businesses must work together to stimulate lending if the economy is to fully recover, the Forum of Private Businesses (FPB) has said. Speaking at the recent Better Business Finance conference in Manchester, FPB chief executive Phil Orford said that the time for “bashing and blaming” had passed, and urged banks and businesses to find common ground in order to boost economic growth and improve lending levels. “We’re talking about enabling or disabling our recovery – it’s that serious. Businesses and banks need to take a critical inward look and accept that the days of easy credit have gone.” The FPB said that tougher lending criteria and centralised decision-making were two main reasons for small firms failing to secure bank finance. However, Orford insisted that... »

Banks Won’t Deliver on “misguided” Small Business Lending Pledge

UK banks won’t deliver on their pledge to lend more to small firms, as the commitment is unenforceable, business groups have said. Under the Project Merlin agreement (PDF), UK banks have pledged to lend about £190 billion to businesses in 2011, including £76 billion to small firms (up from £66 billion last year). The banks have also committed to lend more should the demand arise. The Government has stated that if the banks don’t deliver on lending targets, bonuses to senior banking staff may be restricted. However, the Association of Chartered Certified Accountants (ACCA) said that the scheme cannot be enforced. “This project is completely misguided.” said ACCA senior policy advisor, Emmanouil Schizas. “Like previous projects, it will probably never deliver on the bank’s ... »

Banks & SMEs: “Rebuild Trust” to Boost Lending

Banks & SMEs: “Rebuild Trust” to Boost Lending

Small firms requiring bank finance need to rebuild trust with their bank managers and demonstrate that they are viable to lend to, the Federation of Small Businesses (FSB) has urged. The call comes after an FSB survey of 1,400 small firms highlighted that bank lending to small businesses remains low ― only 18% approached banks for new credit in the first two months of 2010. Of these, just 50% of applications were successful. “There needs to be more openness and dialogue between banks and small firms,” said FSB spokeswoman, Sara Lee. “The banks need to show fair lending criteria and fair rates so businesses know they can approach them. Small businesses, too, need to speak to their bank managers and start to rebuild trust. They need to try to re-establish a relationsh... »