lending

Muted Reaction to New Credit-easing Strategy

Business groups have given the Government’s latest credit-easing scheme a lukewarm reception. The “funding for lending” scheme unveiled by the Chancellor of the Exchequer George Osborne and Bank of England Governor, Sir Mervyn King, is intended to encourage the UK’s banks to lend to small businesses and could support up to £80bn of new loans. Under the new scheme, dubbed “plan B” by some, high street banks will be able to temporarily swap assets, such as mortgage books, with the Bank of England, in return for cash that can be used to offer new loans to customers including small firms. In addition, an emergency liquidity scheme will run for six months to make £5bn available to banks each month so that they can provide credit to SMEs. However, business gro... »

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 Gaining Monopoly on Lending, Warns FSB

Banks Gaining Monopoly on Lending, Warns FSB

High street banks could soon have a monopoly over lending to small businesses, the Federation of Small Businesses (FSB) has warned. The business lobby group is concerned that recapitalisation, bank mergers and initiatives targeted at stimulating bank lending are stifling competition and choice for firms seeking finance.  “Business owners who are refused finance with a major lender have few alternative ways to secure credit,” said an FSB spokesman. “We want to see more alternative sources of finance provided locally, such as through post offices, financial intermediaries and Regional Development Agencies. “Struggling banks should not be sold off to other high street lenders, as this would create massive institutions which would curb competition,” he added.... »

Lending Increases to SMEs

Lending Increases to SMEs

High street bank lending to small businesses increased by £271 million in March, according to the latest report by the British Bankers Association (BBA), writes Emma Allen. The increase represented a five per cent jump over lending figures for the same period last year and it caps a steady rise in each of the first three months of 2009, the BBA said. Small business deposits were also up by £881 million in March. “March also saw an upturn in the number of new small business banking relationships – over 52,000 – which brought the total in the first quarter up to a figure similar to the first quarter of 2008,” said BBA statistics director, David Dooks. “This is despite the more difficult trading environment.” The BBA attributed the “encour... »