24/04/13

The government and the Bank of England have confirmed the extension of the Funding for Lending scheme and its widening to include more types of business finance. Commenting, John Longworth, Director General of the British Chambers of Commerce, said:

“The extension and widening of the Funding for Lending scheme (FLS) shows that the Chancellor and the Bank of England are listening hard, and acting to address continued business frustration around tight credit conditions. We are particularly encouraged by the fact that incentives for SME lending have been sharpened, and that the new-look FLS will cover sources of finance beyond the banks, including asset-based lenders and invoice discounters.

"We welcome the Chancellor's determination to look at ways to make Funding for Lending work for UK businesses, many of whom still feel frozen out from access to finance. Widening the types of business finance covered by the scheme and improving the incentive to lend to SMEs are two very positive steps. Much will depend on lenders' appetite for risk, and we will have to wait and see whether these new measures help get credit flowing to growing businesses – and not just “safe bets”.

"Yet the Chancellor and the Bank of England can, and should, go further. Were they to extend the backing of the Funding for Lending scheme's billions to the embryonic Business Bank, they would energise a new and crucial player in the lending market, and help to solve the long-term structural gap in finance that continues to strangle far too many growth businesses across the UK.” 

Ends 

Notes to editors:

The British Chambers of Commerce (BCC) sits at the heart of a powerful nationwide network of 53 Accredited Chambers of Commerce, serving over 104,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

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