Lending to small businesses falls

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For the second quarter of the year, lending to small and medium-sized firms (SMEs) via the Funding for Lending Scheme (FLS) fell again.

The purpose of FLS is to help banks release loans cheaply to SMEs, especially young and fast-growing businesses. Business groups expressed disappointment with the figures and claim more needs to be done. Net lending to businesses by all banks and building societies, including those not participating in FLS, was up in the second quarter.

The Bank of England asserts it will take time for the scheme to have full effect. Banks can continue to borrow funds until January 2015, however the scheme will only encourage lending to businesses, not mortgage lending. The Chancellor and Governor of the Bank of England agrees more needs to be done to support business lending. This is why the Bank will focus exclusively on business lending.

Should you need any advice on business funding or starting up a business, get in touch with us on 01277 823688 or email eyoung@nineashesbookkeeping.co.uk.

Nine Ashes Bookkeeping is an independent accounting and bookkeeping firm based near Ongar, Essex. We specialise in providing accounting and bookkeeping services to small and medium size businesses. Our team consists of a Chartered Accountant and a qualified bookkeeper with over 10 years experience in the business. We are a friendly, professional firm that enjoys helping our clients succeed and grow. 

Source: BBC News, 28 August 2014