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24/05/2011
Bring Back Traditional Bank Managers, Says Group
The Forum of Private Business is responding to the announcement that the UK's major banks are over £2 billion short of hitting their small business lending target. The group are repeating its calls for better competition, more investment in regional branches and the restoration of lending powers to local bank managers.
As part of their commitment to lending £190 billion to businesses in 2011, including £76 billion to small and medium-sized companies, the ‘big five' banks have pledged to lend £19 billion in the first three months of the year. However, just £16.8 billion has been lent.
According to a joint statement by Project Merlin banks small business lending demand has declined. While the Forum's own research suggests many firms are focusing on consolidation not growth, the not-for-profit organisation is arguing that this downturn is a result of mounting alienation due to lenders' punitive risk criteria and inflated interest rates, rather than indicative of a lack of need for affordable finance.
The Forum's Chief Executive Phil Orford said: "I am disappointed but, frankly, not surprised that these SME lending targets have not been met. We are prepared to wait until the end of the year before making a final judgement but it is clear that the banks are trotting out the same old excuses when they are simply not delivering on the ground."
He added: "There is a widening knowledge gap when it comes to lenders' ability to gauge small business risk. We want to see banks invest in regional services and hand decision making powers back to local branch managers who are best placed to make key lending decisions based on realistic assessments of individual businesses. We must move away from the over-centralised, tick-box mentality we are seeing now."
Pointing to the latest official government figures on SME finance Mr Orford added: "Despite what the banks are saying, the requirement for affordable funding is not going away. There is a real, pressing need for better, more cost-effective growth finance. The problem is that small businesses are becoming increasingly alienated by mainstream lenders.
"More and more of our members are seeking out alternative sources of finance but one of the major barriers is a lack of competition in finance markets dominated by the big banks. The few new and innovative funding platforms that are out there struggle to gain a toe hold.”
The Chief Executive concluded: "To reiterate what we have said before, a lending code that is not binding, targets that banks are not meeting, and mentoring and appeals schemes of unproven merit are just not enough to fix this serious problem."
(BMcN)
As part of their commitment to lending £190 billion to businesses in 2011, including £76 billion to small and medium-sized companies, the ‘big five' banks have pledged to lend £19 billion in the first three months of the year. However, just £16.8 billion has been lent.
According to a joint statement by Project Merlin banks small business lending demand has declined. While the Forum's own research suggests many firms are focusing on consolidation not growth, the not-for-profit organisation is arguing that this downturn is a result of mounting alienation due to lenders' punitive risk criteria and inflated interest rates, rather than indicative of a lack of need for affordable finance.
The Forum's Chief Executive Phil Orford said: "I am disappointed but, frankly, not surprised that these SME lending targets have not been met. We are prepared to wait until the end of the year before making a final judgement but it is clear that the banks are trotting out the same old excuses when they are simply not delivering on the ground."
He added: "There is a widening knowledge gap when it comes to lenders' ability to gauge small business risk. We want to see banks invest in regional services and hand decision making powers back to local branch managers who are best placed to make key lending decisions based on realistic assessments of individual businesses. We must move away from the over-centralised, tick-box mentality we are seeing now."
Pointing to the latest official government figures on SME finance Mr Orford added: "Despite what the banks are saying, the requirement for affordable funding is not going away. There is a real, pressing need for better, more cost-effective growth finance. The problem is that small businesses are becoming increasingly alienated by mainstream lenders.
"More and more of our members are seeking out alternative sources of finance but one of the major barriers is a lack of competition in finance markets dominated by the big banks. The few new and innovative funding platforms that are out there struggle to gain a toe hold.”
The Chief Executive concluded: "To reiterate what we have said before, a lending code that is not binding, targets that banks are not meeting, and mentoring and appeals schemes of unproven merit are just not enough to fix this serious problem."
(BMcN)
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20 October 2011
Bank Support For Small Firms 'Not Enough'
Research shows bank initiatives to boost small business lending have not gone far enough, says the Forum of Private Business Just over a year after the launch of the British Bankers' Association's Business Finance Taskforce, new research suggests that it has not yet achieved its aim of repairing the relationship between banks and small businesses.
Bank Support For Small Firms 'Not Enough'
Research shows bank initiatives to boost small business lending have not gone far enough, says the Forum of Private Business Just over a year after the launch of the British Bankers' Association's Business Finance Taskforce, new research suggests that it has not yet achieved its aim of repairing the relationship between banks and small businesses.
18 March 2011
Chancellor Urged Not To Forget About Finance In Budget
A small business support organisation has urged George Osborne not to forget the issue of bank lending in the forthcoming Budget. The Forum of Private Business is calling on the Chancellor to remember that the problem of funding for smaller firms is still far from resolved, despite the recent ‘Project Merlin’ agreement on bank finance.
Chancellor Urged Not To Forget About Finance In Budget
A small business support organisation has urged George Osborne not to forget the issue of bank lending in the forthcoming Budget. The Forum of Private Business is calling on the Chancellor to remember that the problem of funding for smaller firms is still far from resolved, despite the recent ‘Project Merlin’ agreement on bank finance.
10 April 2013
Governments Business Bank Launched With £300m Investment
The first phase of the government’s new business bank has been launched with the announcement of an investment of £300m aimed at boosting smaller businesses struggling to get finance.
Governments Business Bank Launched With £300m Investment
The first phase of the government’s new business bank has been launched with the announcement of an investment of £300m aimed at boosting smaller businesses struggling to get finance.
04 March 2013
Banks Reduce Lending
The Bank of England has published updated data on the use of the Funding for Lending Scheme (FLS). Today’s publication shows for each group participating in the FLS the amount borrowed from the Bank and the net quarterly flows of lending to UK households and businesses for the fourth quarter of 2012.
Banks Reduce Lending
The Bank of England has published updated data on the use of the Funding for Lending Scheme (FLS). Today’s publication shows for each group participating in the FLS the amount borrowed from the Bank and the net quarterly flows of lending to UK households and businesses for the fourth quarter of 2012.
05 May 2011
Bank Of England Maintains Bank Rate At 0.5%
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.
Bank Of England Maintains Bank Rate At 0.5%
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.
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Northern Ireland WeatherToday:A mostly cloudy start with scattered showers, the showers becoming more isolated and largely confined to the south this morning. Becoming brighter this afternoon, the best of any sunnier spells across northern counties. Northerly winds easing. Maximum temperature 12 °C.Tonight:A dry evening with late sunny spells and some long clear spells overnight. Becoming cloudier across the north towards dawn with a few showers possible. Touch of frost in south. Minimum temperature 0 °C.
