Downing Street played host to the six biggest and best business bank accounts in the country recently, where an in-depth study conducted by the banking institutions in regards to the lack of business lending was recently presented.
The report on the state of business loan availability in the UK, or lack thereof, included statistics that have been quoted by lenders for quite some time amidst mounting criticism from the government; namely that they have the funds available to small and medium-sized businesses.
However, the study also documented that the current demand for lending to SMEs has not been met by the banks that conducted the study, meaning that many businesses have been lacking ways to secure the working capital they may need for growth.
The study’s proposed solution to the problem comes in the form of an investment fund of £1.5 billion to be made available to businesses that meet viability requirements. Initially however the aggregate figures in regards to the amount of funds the big six will total approximately £300 million to £350 million, with the eventual target the previously cited figure. The study did not specify when that £1.5 million target would be met.
Industry experts have already taken issue with the relatively low figures being offered by the big six, as £300 million could equate to an approximate £5 million investment for 60 separate firms, which may have limited use in fostering growth in the small business sector.
Other experts have raised questions in regards to the governmental response to the new fund; the government has made comments that it will be supporting the fund, yet have not specified exactly to what end and how, including whether there will be taxpayer funds populating this new investment scheme.