Banks Dispute Lending targets for Company Formation Sector

The government seems to have put the issue of lending to small businesses firmly on the political agenda; not only have they produced a white paper on alternative finance routes, they have also hinted at the fact that they establish lending targets for banking sector.

This has been seen as an extremely positive move by the small business sector. Martin Cooper, spokesperson for the Forum of Private Enterprise, comments;

“The fact that, in the current economic context, small businesses are having an extremely tough time when apply for finance is well documented. However, until now, I don’t think that the broader implications of the lending situation had been fully realised; the SME sector is the biggest employer in the UK and therefore if the banks continue to restrict access to finance, they are compromising the country’s already fragile economic recovery.

While feedback on setting banks lending targets has been extremely positive from the SME sector, the same cannot be said for the banking sector. In an interview with The Sunday Times, several banking bosses have said that if the government were to set targets, the strategy would not be welcomed and many would refuse to join the scheme.