Business News
Research shows resistance for small business loans
Research conducted by the Bank of England has shown that it has not become any easier for the small business to secure loans discouraging many from expanding and choosing to make savings instead, fearful of future cash worries such as overdraft withdrawals and large penalties.
The small businesses applying for loans have found the process not to be in their favour, long and drawn out with high fees, hindering time scales to which money is needed and dampening expansion and thus progress for many businesses.
Project Merlin, a government initiative championed by small business minister, Chuka Umuna, aims to put in place an agreement between the government and the UK’s four biggest banks to commit to assisting small businesses and bid to lend more money. Umuna has also highlighted in a letter to business minister, Mark Prisk, that net lending has also fallen for 10 of the last 12 months, another fact brought to light by the Bank of England:
“The statistics today show that on the ground, small and medium-sized enterprises are still struggling to access finance to grow their businesses.
“If the government seeks to replace Project Merlin, the Tory-led Government need to get tough. It is crucial they and the banks learn from the shortcomings of Merlin and provide real support for our SMEs.”
What the report doesn’t show is the number of mergers and acquisitions that have happened within the wider economy that have supported functions within varying sectors, such as accounting, advisory and law, corporate finance and IT, all of which shows growth for these sectors.
