By Max Clarke
Today the Bank of England released its quarterly ‘Trends in Lending’ statistics. The report revealed that the stock of lending to UK businesses contracted by around £5 billion in the three months to November.
James Meekings, co-founder of Funding Circle, comments:
“These figures are another deafening blow to the banks’ claims that they are lending. Look even closer and you will see how situation is getting worse for small businesses — the stock of lending is falling faster and the interest rates being charged are putting them off applying for loans in the first place. Little wonder creditworthy small firms are looking to other sources for cheaper, simpler, fairer finance.
“The demand we have seen at Funding Circle is testament to this. Our lenders compete against each other in auctions to lend to small businesses, which keeps the rates competitive — the average interest rate is 8.2%.
“The future of Britain’s small businesses is being put at risk by the dearth of funding available from traditional sources so it’s no surprise firms are looking elsewhere to secure their future.”