No Lending - Need for Private Equity
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We have been saying since January 2009 that Private Equity would take over as banks no longer lend. We were right . We provide capital to businesses through our capital funding network - from VC to large cap - worldwide.
Bank lending to cash-strapped small businesses has plunged to a record monthly low, official figures revealed yesterday.
Just £449million was lent to small firms in April, according to the British Bankers’ Association.
This is the lowest amount ever recorded for the month of April – and is less than half the typical monthly amount of £991million handed out in 2008, before the crisis began. Banks: They're not lending to small businesses despite the promises made under 'Project Merlin'
Experts yesterday seized on the figures, warning that the bank lending system is ‘broken’.
James Meekings, director of Funding Circle, an alternative way for firms to raise cash, spoke of his fears about the troubled relationship between small firms and big banks.
He said: ‘The fact that strong, creditworthy businesses are unable to access funding means that the system is broken. We know that the cost of sourcing such funding and the lengthy process can be a huge barrier for time-poor small business owners.
‘When a director is running a business, the last thing he or she wants to do is spend half a working day in the bank manager’s office and the other half filling out paperwork, then wait months to access the funding.’ Chancellor George Osborne's attempts to get the banks lending have not been successful
Research commissioned by the Funding Circle found that many firms which needed money over the last 12 months had abandoned the process.
Many said they were ‘worried that the bank would lower their overdraft if they sought a loan’.
The study found that if they needed money, 38 per cent used their own savings and 20 per cent asked for help from friends and family.
On Friday, the Bank of England will publish the latest figures for Project Merlin, the Government’s attempt to make banks lend.
The first SET of figures, published in May, showed Britain’s banking giants had failed to lend the amount to small firms which had been promised.
Between January and March, the banks had promised to hand over around £19billion to small firms under the terms of Project Merlin.
But the Bank’s figures showed just £16.8billion was made available, a shortfall of £2.2billion.
The British Bankers’ Association says the banks are now keeping their promises, lending £37.4billion to small firms between January and June, close to a target of £38billion.
A spokesman for the Merlin banks – Barclays, HSBC, Lloyds, Royal Bank of Scotland and Santander – said they are ‘on track’.
He added: ‘The banks’ efforts to encourage customers to come forward with borrowing proposals are SET against the overall economic environment, which remains challenging, and business demand for credit, which remains weak.’
Written by Randolph Buss on Wednesday August 10, 2011 at
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BRIM Blog by Randolph Buss
BRIM by Buss Randolph on 2011-10-10
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