Tax & Accounting News

Government to Keep Watchful Eye on Bank Lending to Small Businesses

18/11/2008

A new agreement with leading banks means that the government will have access to key information on the scale and availability of lending to small businesses.

The move was announced on 12 November, when the first meeting of the government’s new Small Business Finance Forum took place.

The forum brings together banks, small business organisations and businesses to improve communication between them and resolve difficulties on business lending, which has caused

Now a panel of senior officials from HM Treasury and the Department for Business, Enterprise and Regulatory Reform (BERR) and representatives of the Bank of England will monitor and discuss with individual lenders the availability, risk and overall cost of lending to small and medium-sized enterprises (SMEs) by Barclays, HBOS, HSBC, LloydsTSB and RBS.

These banks have agreed to provide, in confidence, information on these aspects of their lending to the monitoring panel.

Announcing the formation of the panel, Patrick McFadden, BERR Minister of State, said it demonstrated the government’s “continuing commitment to ensure that appropriate levels of finance are available for SMEs in the UK”.

Andrew Cave of the Federation of Small Businesses commented: “It is good the government has got a commitment from the banks that they will disclose this information. It will give the government a chance to see the facts rather than the rhetoric.”