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Yorkshire Bank criticised over business lending decision

Date Added: 08/01/2013  

An MP from the north of England has stated he might report Yorkshire Bank after it revealed it is to pull out of business lending.

Clive Betts, the MP for Sheffield South East, explained he thinks the decision to quit business lending by the bank could turn out to be a blow for the region's economy.

Speaking to the Yorkshire Post, he stated the bank has also been accused of mis-selling loans to small to medium-sized enterprises across the county.

Mr Betts said he has heard of firms getting tied down to "inappropriate" loans that have "very high get-out clauses".

The MP added he thinks it is "extraordinarily strange" that Yorkshire Bank has pulled out of business lending at a time when the government has stressed loans to companies are a vital way to ensure the economy starts moving in the right direction once more.

"That's what they are being asked to do by the government. I thought that's what banks are supposed to be there for - to lend money to businesses," he said.

Mr Betts also noted he believes banks ought to be using the current difficult financial conditions to support the smaller companies that are struggling to keep their heads above water.

Many firms may need to take business debt advice in the coming weeks and months in a bid to avoid being served with a winding up order.

A spokesman for Yorkshire Bank claimed that transferred loans continue to be managed in line with previously agreed terms, stating: "Throughout the year Yorkshire businesses have continued to expand and grow with our support."

He added a ring-fenced fund of £1 billion specifically for businesses that want funding to grow their company was announced by Yorkshire Bank just two months ago.

The Federation of Small Businesses recently criticised the Funding for Lending Scheme for its failure to have a positive impact on the state of business lending in the UK.

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Posted by Michael Beam

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