Lack of lending down to banks
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...their overdrafts withdrawn."
One view, as expressed by School for Startups founder, Doug Richard, is that businesses can go it alone without the funding of banks. Given that most business know they will be rejected a loan from the bank, they are simply not bothering to apply in the first place.
“It’s no secret that bank funding for young businesses is in short supply, but that’s not going to hold back Britain’s booming enterprise culture," said Richards to Fresh Business Thinking.
"Banks never have, and never will be, the right option for entrepreneurs seeking capital, and it’s initiatives like the Seed Enterprise Investment scheme, along with online alternatives like crowdfunding, that will provide small business owners with the capital that they need to get going, or grow their business."
However, David Dooks, BBA's statistics director, claims the lack of lending is solely down to the state of the economy and the reluctance of businesses to take on more debt.
"The continuing economic uncertainties both in the UK and in the Euro area are having a dampening effect on activity within firms and households," Dooks said. "Firms are holding back on borrowing for investment until trade prospects improve."
James Benamor, CEO of Amigo Loans, was quick to remind banks of why they were formed in the first place.
“Bankers should remember why their institutions were founded in the first place - banking is about making it possible for good people to borrow and repay money, to enable them to get on with their lives and create opportunities in our economy,” he said.
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