The £80billion Funding for Lending Scheme was launched at the start of August this year – so how is it doing? It has been hailed as a potential source for huge amounts of funding for small business, but is this the reality? Figures recently released have shown that loan and mortgage approvals from high street lenders involved in the scheme have improved.
The number of loans approved for households has risen by 2,103, while the number of homes approved for re-mortgage has increased by 1,860. This could reveal some of the reason why there is a degree of optimism amongst some home owners that the property market will soon improve.
Unsecured customer credit has also risen to £1.2 billion in September, the sharpest rise since February 2008. This included an increased of £307 million in credit card borrowing.
More than 20 banking groups have now signed up to Funding for Lending, including the five largest lenders in the UK, and funding costs have fallen by around one percent.
So, how are small businesses faring? Most banks have not volunteered figures as of yet – they will be part of their Q3 figures released in November, though Santander has said they have increased SME lending by more than 20% per year over the last three years. Lloyds has previously said that they have an allocation of £1.4 billion and offer a 1% reduction in interest rates for new businesses – in September, it posts a 4% increase in net lending to small business.
Whether or not small businesses are finding loans and overdrafts easier to access is still up for debate – how is your business faring? If loans are still out of reach, then alternative funding such as invoice finance could be another option.