Bank Lending Increases But Not For Small Businesses 
Figures just released by the Bank of England show that the UK’s biggest four banks increased their lending to companies in the third quarter of this year but lending to small and medium-sized businesses (SMEs) fell to £18.8bn from £20.5bn in the 2nd quarter.

Under the Project Merlin agreement, the banks need to lend £32.3bn in the last three months of the year to meet their overall target of £190bn and to meet the target of £56.1bn to SMEs, they must loan almost £20bn between now and the end of December.

John Walker, national Chairman of the Federation of Small Businesses, said the banks had "yet again missed the small business target,” adding that the lending targets failed to address the "lack of competition" in the banking sector.

"We need to see a clear change: more competition and new lines of credit opening for small firms if they are to help boost the recovery," he said.

And Brian Berry, Director of External Affairs at the Federation of Master Builders commented: "Despite the new figures on lending through Project Merlin showing that the UK’s major banks lent £18.8bn to SMEs in the third quarter of this year, our members are telling us they are still finding it difficult to access finance.

The BoE figures tally with those issued by the BBA, the trade association for the banking sector. A BBA spokesman said: "The Merlin banks are on track to meet their business lending commitments... However, the overall economic environment remains challenging and business demand remains weak."

The figures come as a Bank of England director called for a loosening of bank lending rules. Andrew Haldane, the Bank of England's executive director of financial stability, said that rules that hold back lending to small businesses should be relaxed when the economy is faltering.

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