Banks miss targets for small business lending
13 Feb 2012
The UK’s five main banks have missed their Government targets for lending to small businesses, a new report has revealed.
The banks met their overall lending targets, allowing new loans of £214.9bn, but only £74.9bn was lent to small and medium-sized businesses, compared to the target of £76bn.
According to the banks, demand for credit fell among smaller firms during 2011, and remains weak.
Meanwhile, the All Party Parliamentary Small Business Group is examining the reasons why many small firms are still struggling to access finance.
The Entrepreneurship Inquiry will explore a number of issues, including why women and mature people are less likely to apply for bank finance, and why a third of small businesses are still having problems accessing money from the banks.
John Walker, National Chairman of the Federation of Small Businesses, said, ‘We have heard for so long that small businesses cannot access finance from the banks, but for some entrepreneurs even approaching the bank is not an option. While alternative forms of finance need to be promoted, this needs to change and confidence needs to be instilled in all sectors of society so that they know bank finance is a real option’.