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Project Merlin 'a step forward for business lending'

Date Added: 11/03/2011  

Vince Cable has said the Project Merlin deal represents "a step forward" in the government's bid to improve bank lending for businesses.

Speaking to the This is Money website, the business secretary admitted the flagship agreement does not represent a complete solution to the difficulties faced by companies seeking finance.

However, he claimed the coalition has moved in the right direction by securing lending pledges from the banks.

"To suggest this is a solution to the problem of bank lending would be absurd. But it is a step forward, which is all I have ever claimed," Mr Cable told the publication.

Under the terms of Project Merlin, banks have agreed to lend about £190 billion to businesses this year, including some £76 billion to small firms.

Earlier this week, new bank Aldermore said it has more than doubled the amount of lending it provides to small and medium-sized enterprises (SMEs) in one year.

The company had outstanding loans to SMEs of £410.2 million at the end of 2010, up from £198.6 million 12 months ago.

Posted by Miles Pritchard 

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