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Funding for Lending figures ‘disappointing’ for small firms

Business groups have given their reactions to the latest lending figures from the Bank of England, which reveal that net lending fell by £0.3bn during the first quarter of the year, compared with a £2.4bn fall in the previous quarter.

Phil Orford, Chief Executive of the Forum of Private Business, said, ‘These figures will be another disappointment to small firms, particularly after the recent tweaks to the government scheme and especially after the glimmer of hope last month’s GDP figures provided’.

‘The Funding for Lending scheme has supported the supply side, most noticeably with mortgage lending which has led to an improvement in demand. It is now imperative that the major banks focus on delivering the same successful formula to businesses with innovative and attractive products.’

Meanwhile, the Confederation of British Industry (CBI) emphasised the fact that the scheme is reducing the cost of finance for businesses and households.

Matthew Fell of the CBI said, ‘There are substantial headwinds hampering lending, including a lack of confidence amongst businesses and deleveraging by banks’.

‘Funding for Lending is only part of ensuring growing firms have the finance they need and businesses should also consider other available options, like equity finance or retail bonds,’ he added.