Banks failing to lend small firms the funds they promised

Simon Quicke

The banks are continuing to fail to provide credit for small businesses and are set to miss the targets they agreed with the government to start providing money to cash strapped firms.

But figures from the Bank of England for the first quarter show that the big five high street banks lent a total of £16.8bn to small firms.

If they maintain that rate of lending then the banks will miss out on the £76bn they pledged under Project Merlin to give to smaller firms over the course of this year.

Project Merlin requires the big five banks to lend at a combined level of £19bn a quarter and the funds are desperately needed with recent figures from the Forum of Private Business showing that the majority of SMEs continue to rely on bank lending for credit.

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