4R Blog

RSS Feed

Funding for Lending Scheme 'does not increase access to credit'

Date Added: 05/12/2012  

The Federation of Small Businesses (FSB) has criticised the Funding for Lending Scheme (FLS) for failing to improve access to credit since it was launched by the government.

John Walker, chairman of the FSB, claimed the programme has only succeeded in making credit cheaper to those successful in their loan applications.

The FLS was announced by the coalition during the summer and it was claimed it would provide a boost to the nation's small firms that have found it hard to get approval for loans.

Mr Walker explained that there is a need for more competition in the business lending sector in order to improve the flow of credit from banks to companies in the UK.

"Our data tells us that around four in ten small firms were refused loans in the third quarter and independent data shows that businesses looking for finance for the first time are more likely to be refused," he said.

Paul Fisher, the Bank of England's executive director for markets, stated it is too soon to judge whether or not the FLS has been a success, though figures show around £500 billion has been lent out by banks since it was announced by the coalition in August.

Economic secretary to the Treasury Sajid Javid stated the FLS is still in its early stages, but has already helped to deliver half a billion pounds in loans for both households and businesses.

"Though it will take time to fully feed through, today's positive data shows participating banks are increasing their lending," he said.

Last month, Santander announced a range of business lending initiatives as part of its ongoing part of being in the FLS in the UK.

Santander UK chief executive Ana Botin stated the bank remains committed to increasing the flow of credit to small firms across the country that are in need of extra financing.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Michael Beam

Get the Help You Deserve

0800 90 20 123

Urgent Help Call 24/7

020 7183 2606

We'll Call You

Request a Callback