- 3 updates
While the Funding for Lending Scheme has been helping boost the mortgage sector, it has failed to make much of an impact on small businesses.
Official figures last week showed net lending to companies slumped by £4.8 billion in the three months to February, declining by £2.8 billion in February alone.
A Bank survey also showed that while credit availability has improved for big and medium-sized firms, small businesses still struggle to access funds. The same survey predicted "significant increases" in demand for credit from small and large firms in coming months.
- The Bank of England and Treasury are expected to extend their Funding for Lending Scheme to specifically target banks which lend to small businesses - a sector currently starved of credit
- Reports claim high street banks will also be given added incentives to extend credit to small firms
- The announcement will come a day before GDP figures, which are expected to show Britain has narrowly avoided a triple-dip recession by eking out growth in the first three months of the year
A scheme to lend billions of pounds to businesses is expected to be extended today to help inject money - and confidence - into the British economy.
The £80 billion Funding for Lending Scheme was launched last Summer to offer banks funding at low interest rates on condition it is passed on to businesses. Today the Treasury and Bank of England will announce more support for a key part of the economy - small businesses.