Last week it was GDP figures, this week The Bank of England’s announcement of a record rise in loans to small businesses brought more cheer on the economy on Monday.
Figures revealed a £238m increase in lending to small businesses during June – the biggest rise since the Bank began compiling data two years ago, and bucking a £1.3bn drop in business lending overall.
June’s rise failed to fully reverse last month’s £476m fall in lending, but came after changes to the Bank’s Funding for Lending Scheme (FLS) in April which has provided a big incentive for banks to lend to small businesses until the end of the year. Encouraging news but there is still some way to go, a sentiment echoed in Hilary Osbourne’s article in the Guardian later in the week that suggested that whilst FLS had been an important factor in boosting the housing market it still had some way to go when it comes to business lending.
No time for complacency
Bank lending and access to finance continues to be an issue for our members. It’s positive to see an increase in lending figures but we can’t get complacent. Our recent Cash Flow and Finance report showed that almost a quarter of our members see access to finance as the main concern for their business. Whilst the FLS has made credit cheaper, many businesses are still telling us that they are struggling to access that all-important business finance. We see this as key to Getting Britain Trading and are working with members to provide advice and support in this area.
We are keen to get a clearer picture on whether you have seen the funding situation ease in the last three months so please take part in our latest Pulse survey. Is it a brighter picture or is there still some way to go? Click here and let us know.
Your right to appeal
We have also been working closely with the Business Finance Taskforce and the BBA to raise awareness of the appeal process available for small firms who have been turned down for bank lending. Since its launch in 2011 the process has returned over £30 million in lending into the economy; however we agree with Greg Clark, financial secretary to the Treasury, who said there is still work needed to ensure it is not “the best kept secret in banking”.
We are looking to spread the word and with almost 40% of decisions overturned each year, it is well worth looking into.
If you have been turned down for finance you can visit the Better Business Finance website to find out more.
We will also be adding a link to our new look website, which will be launched shortly, so that businesses can click through and immediately start the appeals process.