4R Blog

RSS Feed

Business lending 'is back to normal'

Date Added: 14/06/2013  

Business lending is starting to return to a more "normal" and "sensible" place, according to the ombudsman, though official data shows the amount being loaned to firms is dropping.

Professor Russel Griggs stated the reason why the amount of money being lent to small to medium-sized enterprises (SMEs) is falling in the UK is due to a lack of demand, as companies are wary about the state of the economy.

In his new report, the ombudsman for business lending claimed that he has unlocked more than £30 million of new lending by forcing banks to reconsider lending refusals, reports BBC News.

It was revealed in the document that the number of appeals made by SMEs rose last year to 3,311, which is up from 2,177, representing a rise of 52 per cent.

"For those of us that can recall the time before the buoyant period of the 90s and early 2000s, then it is probably back to where it was before that," the professor said.

He added banks have had to adjust to the gap left in the business lending market from many lenders removing themselves from the sector, while they are also taking more time over decisions regarding whether or not to approve a loan.

"The challenge that all politicians, lenders and economists have is that we have never been where we are before, in terms of a return from a recession," the ombudsman wrote.

Howard Sears, managing director of the venture capital firm Astuta, told the Daily Mail recently that business lending data shows there are more problems within the industry than a lack of demand from SMEs.

He claimed that banks are actually not willing to lend to SMEs, despite the fact they have been stating regularly that they want to increase the amount of money they approve in loans in accordance with the government's Project Merlin initiative and other schemes designed to boost lending to companies.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Miles Pritchard

Get the Help You Deserve

0800 90 20 123

Urgent Help Call 24/7

020 7183 2606

We'll Call You

Request a Callback