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Business lending problems 'are a misconception'

Date Added: 01/06/2012  

Businesses have money to spend and it is a misconception that there is an issue with lending from banks, it has been claimed.

According to Chris Sullivan, chief executive of the UK Corporate Banking Division at RBS, it is not the case that banks do not want to lend money to small firms.

Speaking on the BBC On The Money podcast Are Banks Doing Their Best? he noted there are around 1.1 million small businesses that are customers of either RBS or Natwest.

Mr Sullivan pointed out the deposit accounts of those particular businesses are at record levels of all time, meaning there is money available to spend on growing their company.

"There is a commonly held misconception that banks don't want to lend, which is far from the truth. I can't speak for all the others but certainly my business plan is that I'm going to grow the business over a period of time, I don't intend to shrink it to success," he said.

It was added by the RBS representative that under 50 per cent of small to medium-sized enterprises in the UK are using their overdraft, which is well below the figure of 65 per cent that was recorded four years ago, at the worst point of the recession.

Earlier this month, HSBC announced its business lending figures for the first three months of the year, with more than £3 billion loaned out to small firms by the bank between January and March.

Jacques-Emmanuel Blanchet, deputy head of HSBC Commercial Banking Europe and head of commercial banking UK, claimed the statistics demonstrate the fact that the bank wants to support viable businesses.

Some £1.3 billion of the money that was lent to small firms in the UK in the first quarter of the year was to companies either trading internationally or with a desire to do so.

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Posted by Michael Beam

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