By Max Clarke

After protracted negotiations with the nation’s leading banks, the Government outlined a series of measures under an agreement dubbed ‘Project Merlin’, in order to increase lending to small businesses in order to stimulate the recovery.

More than three months later, however, businesses complain that funding is still largely unavailable. The Government has responded to this persistent credit dearth by blaming the banks for their failure to aid smaller businesses.

"The Government is right to be annoyed at the banks for failing to lend enough to small businesses,” commented Jason Stockwood, CEO of business insurers, Simply Business, “however they are also to blame for putting such a toothless agreement in place to begin with.

Project Merlin does not include enough of an incentive for the banks to ensure the money available is actually accessible to the businesses that need it. From my contact with startup and small businesses, it is clear that securing bank funding still involves a massively bureaucratic and slow application process that drains time and resource with no guarantee of success.

"Unless the Government puts more pressure on the banks it will seriously hamper public confidence in this administration. There needs to be a funding commitment from banks, particularly those that the public are shareholders in, and concrete repercussions if these targets are missed. This help should also be tied in with initiatives like StartUp Britain so businesses have access to the advice they need to make the best use of the funding available. This will help ensure Project Merlin isn't just an empty initiative and actually drives business growth across the country."