the business ladder

Following talks between the government and banking system, 2011 is to be the year that sees large banks promising small and medium businesses access to £76 billion in new loans.

In 2010 lending to companies was set at £179 billion in total, which sees an increase this year to £190 billion being available to companies of all sizes. Furthermore, the banks have stated that if demand surpasses this figure, they will seek to lend more to keep up with the markets needs.

The Federation of Small Businesses (FSB) has stated that despite the lending targets increasing, “major restructur[ing]” of the sector is still required.

The FSB’s National Chairman, John Walker said that “today’s announcement should not be allowed to let the government or the banks off the hook, and is a preamble to what we hope will be bigger announcements from the Independent Banking Commission.

“Many small firms aren’t going to the banks to access finance and credit and the main problem they face is the cost of credit. Small businesses have lost faith in the sector and are looking at other means of finance – and it is the smallest of firms that need finance most.”

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