Creating new banks will not solve the funding gap faced by businesses, according to the British Chambers of Commerce.

Creating new banks will not solve the funding gap faced by businesses, according to the British Chambers of Commerce.

Adam Marshall, director of policy at the BCC says, 'Too often businesses face Hobson’s Choice in getting the finance they need. There are limited choices for businesses looking for credit vital to grow, invest, and take on staff. What’s more, switching between banks can be an administrative nightmare for many companies.

'We need a more competitive banking environment that enables businesses and consumers to access the best products and services. The commercial banking industry has to change, and both government and regulators must create an environment that ensures firms get a fair deal from lenders.'

The comments are in response to Ed Miliband's speech on banking, which called for more competition in the sector by introducing at least two new banks.

Marshall adds that creating new banks is one way of driving up competition and choice, but on its own, it will not solve the funding gap faced by new and growing firms. 'The creation of a dedicated business bank would ensure that new and growing companies can access the finance they need to develop new products and services, export to new markets, and take on more staff.'

See also: SBS must go, says BCC