A recent study from the Bank of England showed that the government’s flagship Funding for Lending Scheme (FLS) declined in the first quarter of 2014. Net lending from the 36 banks and building society participants was down by £0.7bn for SME’s, compared to the previous quarter.
One of the biggest plans for legislation is to force banks that reject mortgage and business loan applications to pass on details to alternative lenders.
John Longworth, director general of the British Chambers of Commerce, said: “It is concerning that lending to firms across the country has continued to contract even though the Funding for Lending scheme has been refocused towards business lending. This provides further evidence that Britain’s business finance system remains broken.”
Despite lending from banks falling for SME’s, alternative lenders have stepped up to fill the gap. Riskier lenders with an appetite for funding small businesses are appearing almost every week. Here at business funding we connect business owners with the appropriate advisers, depending on the needs of the business and the financial situation.