On Behalf on Griffin & King
It is now one year on from the start of the Government’s ‘Project Merlin’ deal with high street banks to improve the supply of credit to businesses. The figures show that lending to small and medium sized forms have been negative in nine months of the last year.
The Bank of England’s latest ‘Trends in lending’ report shows that lending to companies with sales of less than £25M has fallen by over 6 per cent in the three months to November.
Companies with sales of less than £1M has reduced by 35 per cent in the three months to November.
Overall lending to businesses increased slightly over this period (three months to November) but even the large companies reported that credit was ‘hard to get’ which was the first time they had done so since early in 2010.
Lending to businesses of all sizes contracted by over 2 per cent in the year to November.
Tim Corfield comments, ‘It can’t be expected that banks lend to businesses that can’t meet appropriate lending criteria. Unfortunately, there does seem to be good businesses out there also, who cannot raise any finance.’
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