According to the Daily Telegraph, UK small businesses and SMEs are yet to see any real improvement in the availability of finance. This is in spite of the government’s recent bail-out of some of the country’s biggest banks.
It is not surprising when we hear that the number of loans lent to UK businesses of all sizes fell for the ninth month in succession in October, according to the Bank of England.
Both RBS and Lloyds TSB are unlikely to hit their lending targets, even though these formed a key condition of the recent taxpayer-led bailouts.
Lloyds TSB has been told by the government to deliver around £11 billion while RBS has a £16 billion target. Both banks are on track to fall short of these figures which spells bad news for small businesses looking for affordable credit in order to expand their operations.
However this news does not seem to worry the majority of SMEs, including umbrella companies, who believe that an upturn in the economy will improve their position much more than having better access to finance.
Almost 40 per cent of small companies say that better market conditions is their number one wish for next year, while less than 15 per cent would like to see an improved work/life balance, with just under 7 per cent wanting better access to short and long term loans.
Of the small businesses that took part in the survey, 30 per cent said market volatility was their biggest concern, while 1 in 5 were worried about a lack of liquidity and cash flow.
The British Chambers of Commerce has claimed that 63 per cent of businesses are planning for another tough year ahead. And just recently they called on the Monetary Policy Committee to encourage banks to lend more to UK businesses.
The chief economist at the British Chambers of Commerce, David Kern, warned: “Dangers to the UK’s productivity are reinforced by the new lending trends figures, which show that the flow of credit to business remained negative in October, with annual growth rates across all company sizes continuing to weaken.”
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