Bank lending to small businesses went up by £271m in March according the British Bankers’ Association (BBA), even though there are still widespread complaints that financing can’t be obtained.
"There is clearly an unresolved inconsistency,” said the Treasury Committee's chairman John McFall.
He pointed to “widespread and clearly sincere complaints that credit is difficult to obtain and increasingly expensive” - the Treasury Committee found businesses were having to pay much higher interest rates and borrowing charges.
But the BBA insisted lending to small businesses is about 5% higher than a year ago. BBA statistics director David Dooks also said lending to small businesses “has risen in each of the first three months of 2009, reflecting general banking support and individual bank pledges to make finance available”.
But are these effects being seen? Are small businesses getting finance? Royal Bank of Scotland assert they are lending to five to six small business a day.
And let’s not forget many banks are compelled to lend as they’ve borrowed so much from the government.
Perhaps, then, banks are just being more vigilant than ever before, so finance seems more difficult to come by.
If you’re having problems obtaining bank finance, it’s be well worth your while reading this feature on what to do after you’ve been rejected – it gives you advice on how to make the perfect application, why you should plough on and what you need to have in place to meet a bank’s lending criteria.
Don’t lose hope if you’re after bank finance. As Sahar Hashemi, co-founder of Coffee Republic, told Smarta, "You should expect to get no’s the first 19 times and only then should you start expecting to get a yes." As every entrepreneur knows, if things don’t go your way first time, you need to try, try, try, try, try and try again.
Then try again.