Tuesday 23 April 2013
Lending to businesses in the UK fell by a further £4.8 billion in the three months to February, it has been revealed.
Figures published by the Bank of England point to a 4.4 per cent reduction in loans to companies compared to the equivalent period 12 months ago.
The Bank also reported that banks participating in the Funding for Lending Scheme (FLS) offered less credit to households and businesses in the second half of 2012 than in the previous six months.
FLS was launched in August last year - with the premise being that banks could lend from the Bank of England at low cost providing credit is passed on to businesses and individuals.
Christopher Shaw, chief executive of Platform Black, said the FLS "has let Britain's businesses down".
"For all its financial firepower, the scheme has failed to unblock the credit pipeline," he stated, as reported by Fresh Business Thinking.
"Bank lending to business has moved from decline into freefall. Net lending in February sank to levels not seen since 2010 - and not far off those seen in the depths of the credit crunch."
Mr Shaw said the FLS may have persuaded the banks to offer more mortgages, but most of the mainstream banks "remain unwilling or unable to lend to business".
Find out how Microsoft solutions can help your business control costs more effectively.
Posted by Dan Smith