The latest Bank of England lending figures are out – and some are saying that they highlight how Britain’s growing businesses are being neglected when it comes to bank lending. The official data shows that net lending fell by £300 million over the first 3 months of 2013. John Longworth, Director General of the British Chambers of Commerce (BCC) believes that many potentially fast growing businesses are being left out in the cold:
“Although the £300m fall in lending was a smaller drop than the previous quarter, it is a concern that lending continues to contract despite the Funding for Lending Scheme having been in place for nearly a year. It is also worrying that usage of scheme seems to have dropped significantly since the end of 2012,” Longworth said.
“The real test for Funding for Lending is whether it is able to get credit flowing to young and fast-growing businesses. Unfortunately many of these growth firms are still being left out in the cold when it comes to accessing finance, which prevents them from expanding, creating jobs and helping to drive a business-led recovery.
“These figures give weight to the argument for the swift delivery of a British Business Bank, which must have both the scale and the infrastructure needed to help young firms grow.”
Funding for Lending has indeed failed to impact significantly upon SMEs, with many failing to feel the benefit of increased bank lending. The Business Bank is one of Vince Cable’s priorities and was outlined in the recent budget announcement – but this will take a while to materialise. In the mean time, alternative finance options such as invoice factoring and invoice discounting can help many businesses get access to the funding that they need.