So much for the banks starting to lend to the UK's small and medium-sized businesses….
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So much for the banks starting to lend to the UK's small and medium-sized businesses…
The latest Funding for Lending Scheme data published by the Bank of England earlier this week showed that lending to non-financial businesses fell once again in December, this time by £0.6 billion.
Lending to small businesses was also down (surprise surprise) by £0.3 billion. For Britain's businesses, many of which are desperate for funding and credit, this is not good news.
The irony is that, according to figures released the same day by the Bank, mortgage approvals in January reached their highest level since November 2007.
Just under 77,000 mortgages were approved in the first month of the year, up from December's figure of just under 73,000.
While it's still shy of the circa 90,000 per month mortgage approval level seen pre-crash, the mainstream mortgage market is steaming ahead.
But this is without doubt a growing problem for Threadneedle Street. It wants the banks to lend more to our SMEs, which are, after all, the engine of the economy. But this simply isn't happening yet in any material way.
Instead, loans to households continue to skyrocket and are arguably fuelling a property price bubble.
In both cases, in other words, the Bank has arguably got the opposite of what it wants: a recovery based on consumer spending and mortgage take-up that is not backed up by hard progress among Britain's SMEs.
Thankfully there are a growing number of alternative finance providers - including bridging lenders like ourselves - that are stepping in where the high street banks fear to tread, and helping businesses finance themselves in a number of different ways.
But despite this, unless the Bank of England can find a way for the High Street banks to truly regain their appetite, there's a worry that the consumer-led recovery could eventually run out of steam.
- Jonathan Samuels, Chief Executive of Dragonfly Property Finance.
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