SMEs in the UK are still struggling to secure finance despite the fact that the Government has been encouraging banks to lend more, according to new figures.
In July of 2012, the Bank of England and the Treasury launched the Funding for Lending Scheme (FLS). The way the initiative works is that the Bank channels cheap funds to building societies and high street banks, which they then use to provide affordable loans to UK businesses.
However, new statistics released earlier this year indicate that the scheme is now failing, with the amount lent under the initiative over the last quarter of 2014 falling to just £810m.
Lending levels also fell for the previous three quarters, despite the scheme being restructured to ensure that more of the funding went to smaller firms. In fact, these businesses reportedly borrowed £2bn less than the year before. The figures show that despite the changes, larger corporations also borrowed £14bn less from banks.
John Allan, the Honorary National Chairman for the Federation of Small Business, said:
“Evidence shows that rather than turn to their banks, they [small companies] are increasingly using their own resources to meet their financing needs, and paying down their debts rather than increasing them.”
Increasingly, firms are turning to asset finance brokers to help them to release capital that is tied up in their machinery and other equipment. At DJB, we have assisted many businesses to do just this, so we can help you to do the same. It is a quick, flexible and easy way to borrow money.
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