- British banks and building societies drew down £5.5bn in Q3 2013 from the Funding for Lending Scheme. Net lending increased by £5.8bn in Q3 2013.
- The Business Bank to receive an extra £250m of funding
Commenting on the latest figures on the Funding for Lending Scheme (FLS) and the announcement of extra funding for the British Business Bank, John Longworth, Director General of the British Chambers of Commerce (BCC), said:
“It is really encouraging that overall lending is rising, as this will boost the confidence of businesses across the UK. However, the real litmus test for the Funding for Lending scheme is whether it can really get finance flowing to SMEs, and unfortunately the improvement in credit availability is still mostly being felt by the usual suspects in the mortgage market and among large firms. Young, high growth businesses that could be the wealth creators of tomorrow are still being left out in the cold when trying to access finance. Lack of access to long-term patient capital is a particular problem for small firms who want to expand, and this cannot continue.
“The re-focusing of FLS towards business lending plus the announcement that the British Business Bank will receive an extra £250m are both positive steps in the right direction. Both are evidence that policymakers are listening to SMEs about the continued difficulties they face in accessing finance. However, there is a long-term structural failure of business finance in the UK, and a fully functioning Business Bank is the most promising way to solve this problem. But the government’s current plans just aren’t ambitious enough. Unless the Business Bank is scaled up, and has the ability to work directly with high-growth enterprises, we will continue to miss out on a British Google, Apple or Samsung.”
