Business Finance News From United Kapital

Lending Commitments Will Be Met Say Top Banks

Tuesday 22nd of November 2011

According to the latest report, British banks are claiming they are on track to meet lending commitments drawn out at the start of the year, despite news reports suggesting that business lending is on an all time low.

The commitment is part of the "Project Merlin" which aims to encourage small business lending and targets a £190billion lending for a year.

In the first nine months of this year, lending was at £157billion showing the bans to be very much on track.

A spokesperson for the British Banks Association commented, "The Merlin banks are on track to meet their business lending commitments. The first nine months performance demonstrates the banks' commitment to providing businesses with the financial support they need to invest and grow and the significant progress made since February this year. However, the overall economic environment remains challenging and business demand remains weak."

This report contradicts the Bank of England's statistics which stated that lending to UK businesses in the past nine months was down 3.3%.

The Labour shadow Treasury minister commented, "One of the crucial things about Project Merlin is that it doesn't touch on the price of lending to small firms. It's all very well saying that we are offering loans, but not if they are set at usurious rate."

The Government also plans to put in place a "credit easing" project which details will become available later this month. This aims to encourage small business lending even more, which some critics claim to be an admission that Project Merlin has failed. However, others agree that it is one of many ways the Government is attempting to get Britain, and Britain's businesses, back on track.