Darling turns heat up on banks
Jul 27 2009
Banks urged to increase SME lending
Alistair Darling will today urge banks to increase SME lending.
Kim Farrell, corporate finance manager at CBHC Chartered Accountants, says: ‘I hope the meeting will lead to more funding for small businesses and that banks start to assess lending more on a case-by-case basis. There are plenty of viable businesses that under normal conditions would have secured credit.’
Darling commented yesterday that the rate of interest charged on loans appears to have risen, despite base rates being set at an historically low 0.5 per cent. ‘They've got to live up to their promises,’ he said on the BBC’s Andrew Marr Show.
Farrell believes that the increase in interest rate charges has hit small businesses. ‘I do think margins are higher now than they were before the credit crunch,’ he adds.
David Frost, director general of the British Chambers of Commerce, says: ‘It will be business that drives the UK out of recession, but that can only happen if the banks are prepared to play their part. I am still hearing too many stories of small businesses being unable to access appropriate financing.’
According to the British Banking Association, lending to small businesses rose by £391 million in June.
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