Commenting ahead of the release of the Bank of England’s Funding for Lending Scheme (FLS) figures on Monday (2nd September), Phil Orford MBE , Chief Executive at the Forum of Private Business, said:
“We are likely to see a mismatch in sentiment with next week’s figures showing continued poor performance – particularly in small business lending – for the third successive quarter, despite increasing evidence of growing business confidence and signs of recovery.
“Positive signs of economic recovery suggest that business confidence is up. In fact, last week’s BDRC Finance Monitor for SME lending pointed to business sentiment being at its most positive since its inception, with 51% looking to grow in the next 12 months. However, when it comes to looking for external finance, business are simply not turning to the banks, turning to friends or alternatives such as asset based finance.
“Despite awareness of schemes such as Funding for Lending, and an appetite to borrow, businesses are still under the impression that the banks are still not willing to lend, and this perception gap risks disabling the access to finance that is vital to support growth and getting Britain trading at pre-2008 levels.
“My message to the banks is we can’t afford for progress to wither. Banks must be proactive in providing the liquidity the economy needs and promoting awareness of – and access to – the financial mechanisms in place to support lending.”