Funding for Lending figures highlight business finance system still broken

30th May 2014

  British banks and building societies drew down £2.

0bn in Q1 2014 from the Funding for Lending Scheme. Net lending to businesses fell by £2.7bn in Q1 2014. lending to SMEs fell by £723m Commenting on the Funding for Lending figures, published by the Bank of England today, John Longworth, Director General of the British Chambers of Commerce (BCC), said: -It is concerning that lending to firms across the country has continued to contract even though the Funding for Lending scheme has been re-focussed towards business lending. This provides further evidence that Britain's business finance system remains broken. -Although more established firms have little difficulty in accessing the finance they need, the litmus test for the Funding for Lending scheme has always been whether young and fast-growing businesses are able to get the finance they need to expand and drive the recovery, and unfortunately many of these firms remain frozen out of the market. -More must be done to fill this major gap in the provision of business finance, which means increasing the role of equity and bond issues, and delivering a Business Bank with greater scale and ambition than outlined in current proposals.