Small firms still waiting for access to credit to ease


Small firms still waiting for access to credit to ease

Simon Quicke

Those SMEs hoping that the government would make moves to ease up lending will have to wait longer for the banks to change their tight-fisted attitude towards small businesses.

The topic of credit for small firms has been a hot potato for the last couple of years, even before the depths of the recession, and pledges were made during last May's election by all parties to ease the problems.

But according to reports that broke on the BBC yesterday the discussions between the large banks and the government, with a plan to make more SME lending available have stalled.

There had been expectations that the outcome of what has been dubbed Project Merlin would be announced this week but that is now unlikely to happen.

Understandably the announcement handed the new shadow Chancellor Ed Balls a chance to criticise the government and make the point that banks should be supporting small businesses.

The Forum of Private Business has consistently reported the problems its members have had gaining access to funds and its chief executive Phil Orford has warned of a centralisation in banking that is making it even harder for firms to get access to local banking facilities.

There must be a commitment to restore local business lending powers so risk can be gauged on a case-by-case basis rather than the one-size-fits-all, tick-box mentality we are seeing now," he said.

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