Businesses, particularly smaller
firms, are still struggling to access loans, new Bank of England figures have
shown.
Lending to businesses fell again in June for the eighth consecutive quarter and between July 2009 and June 2010, lending was at minus £49.8 billion, meaning businesses paid back far more than they accessed in loans. Lord Oakshott, Liberal Democrat Treasury spokesperson, accused the banks of ‘sucking £50bn out of British business’.
The figures showed that lending to businesses was down by £8.6bn in the second quarter of this year, and come days after David Cameron said that his biggest regret in his first 100 days as Prime Minister was not getting banks to lend more to struggling businesses.
The Bank’s Trends in Lending report highlighted difficulties for smaller firms, saying: “Contacts of the Bank’s network of Agents noted that credit conditions for smaller businesses remained tighter than for larger corporates.”
Banks have come under criticism from business and political leaders for withholding cash from smaller firms in particular, which often have limited options when trying to access finance.