Funding for Lending figures up, but younger firms still struggling with credit

2nd September 2013

British banks and building societies drew down £1.

1bn in Q2 2013 from the Funding for Lending Scheme Net lending to businesses increased by £1.6bn in Q2 2013, but total business lending down £2.3bn since June 2012 Commenting on the Funding for Lending figures, published by the Bank of England today, Dr Adam Marshall, Director of Policy at the British Chambers of Commerce (BCC), said: -Business lending rose in the second quarter, which is good news and will boost confidence. But the credit environment is not where it could or should be, and many dynamic, new businesses are still struggling to find the funds they need to fulfil their growth potential. -Large and established firms often have little difficulty in accessing the finance they need, yet the acid test for the Funding for Lending scheme has always been whether it can improve the flow of credit to younger, fast growing companies that could end up being the wealth creators of tomorrow. Unfortunately the door often remains shut for many of these businesses who can find themselves being discouraged from applying for finance. Those who do apply are often turned down for being too 'high risk'. -A fully functioning Business Bank is essential to plug this gap, but it must be delivered with greater urgency and scale than is currently being proposed by the government. Crucially, the Business Bank must have the ability to work directly with businesses on the ground not just through the same old high street institutions.