Phil Orford MBE, Chief Executive of The Forum of Private Business commented:
"The continued contraction in lending this quarter is yet another sign that more needs to be done to stimulate demand in order to boost lending. It is too early to say whether the changes to the Funding for Lending scheme in April have had a positive impact, but what is clear is that it is the demand side that now needs to be tackled. The banks should take the lead in raising awareness of their financial products and deals available to small businesses.
What is more significant is the lack of awareness and understanding of alternative sources of finance available to small businesses. Real action must be taken to diversify the finance market and to educate small businesses about alternatives to the big banks. The Forum of Private Business is working with partners to improve members' awareness of alternative sources of finance and would urge others to follow suit."
The Forum of Private Business has responded to the publication of the Bank of England's quarterly Trends in Lending report which showed lending to businesses had contracted by around £4.5bn in the three months to May.