Lending to small businesses falls by £800m under FLS scheme » SMEInsider

Lending to small businesses falls by £800m under FLS scheme

The Bank of England’s Funding for Lending Scheme is failing to encourage British banks to boost lending to small businesses.

Lending to small businesses by banks taking part in the scheme fell by £800 million in the fourth quarter, BOE said on Thursday.

However, lending to small firms reduced at a slower rate in 2014 as a whole than it did in 2013.

The FLS was amended to focus on small business lending in 2014, but has provided cheap money to banks on the condition that they lend to British businesses and households since mid-2012. The scheme was extended to run for a further year in December, and participants will be able to draw down funds until January 29th 2016, Reuters reported.

  • This is not encouraging for the SME to even plan their future let alone develop a back-bone to initiate business. Banks do not understand the real world they only understand how to lend money to those that obviously do not need it.

    Banks are probably one of the major contributory factors for the SME downfall.