No rebound in lending expected
Apr 18 2011
Lending may remain tight for the foreseeable future
Small businesses should not expect a rebound in overall levels of traditional lending by the banks, says an independent finance provider.
Philip White, CEO of Syscap says that SMEs will have to explore other forms of finance following the news that write-offs of bad debts by UK banks rose another 8 per cent in 2010 to a record £17.3 billion, up from £16.1 billion in 2009.
Says White, ‘SMEs that are looking to expand, create jobs and invest are going to continue to find getting a conventional loan from a bank a hard slog.’
White adds that businesses will find it easier to raise capital investment by securing funds through leasing rather than by getting a normal loan.
He says this is because leasing is much less of a drain on a bank’s balance sheet than conventional lending.
Explains Philip White, ‘We have banks lining up to provide our clients with funds through leasing, but those same customers would really struggle to get competitively priced conventional bank loans.’
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