The target for the third quarter for lending to small businesses by major banks has been missed. The target was set by Project Merlin, a government initiative, and it has been revealed that the figure is around £200 million short of this quarter’s target. This is according to figures were released last week.
At the start of the year, the largest banking organisations in the United Kingdom, including HSBC, Lloyds, RBS, Barclays and Santander all agreed that they would be setting aside a significant sum for new credit. Nearly £80 billion has been set aside especially for SMEs.
The target for this quarter was nearly £20 billion and figures that have been released by the Bank of England show that this target was missed by £200 million. For the first three quarters of the year the targets have been missed, in total, by around £1 billion. However, for lending to larger businesses the numbers have been exceeded, it is just small companies that are missing out.
An accountant at Barnes Roffe has commented, “Small and medium-sized enterprises are essential in rebuilding the economy and they need to make up for the employment shortfall. The government must take a more active role in encouraging banks to lend to these enterprises and implement a series of penalties for those that fail to do so.”
The founder of MarketInvoice is Anil Stocker who said, “Banks are no longer the best way for small businesses to obtain capital. Project Merlin is meaning that banks are having to extend lines of credit to what they see as risky investments. The Treasury needs to look at alternative methods for bringing financed to small companies.”