Banks up their lending to businesses – Latest Business News
Great news was confirmed today as four of the largest banks in the United Kingdom have begun to up their lending to businesses during the third quarter of this year. Fifty nine billion pounds of new loans were given out within the past three months of the year compared to fifty two billion in the previous months. These loans though have been mostly aimed at larger businesses as small and medium sized companies saw their loan totals drop from twenty one billion to eighteen billion pounds during this year second quarter. There was an agreement put in place called the project Merlin agreement that companies would receive a minimum of one hundred and ninety billion pounds of new investment.
For the project to reach its target an additional thirty billion pounds of additional investment is needed by the end of this year. Small and medium sized businesses will need to be in receipt of almost twenty billion pounds between October and December for them to be able to hit the end of year investment target of fifty six billion. The EEF which used to be known as the Engineering Employers Federation have been overjoyed by the fact that the countries banks are beginning to lend again. Unfortunately there are many critical items which the Merlin project has not addressed such as the expense of credit which involve terms outside of the headline amount in regard to SMEs. With peoples confidence and trust in the stock market falling there are many issues that a large number of people feel need confirming before all is hunky dory. With many markets seeing weak demands and product requirement during this period of depression the state of loans and their rates is an essential issue that needs addressing as soon as possible.
Many people and experts believe the banks have missed their targets of funding and helping small businesses with an extra disadvantage of increasing the lack of competition within the banking sector. There obviously needs to be a clear change with newer lines of credit and more competition for new companies which could be hugely beneficial to them and overall help the recovery of the economy. The Merlin project includes banks such as Barclays, Lloyds Tsb, Royal bank of Scotland and Hsbc with an emphasis of getting more on board in the near future. The government has helped the situation by stating it would keep an informed eye of issues such as bonuses in an attempt to improve transparency within the sector. Overall this has been great news for many companies who have found the crisis within the euro zone and the recession in general a major challenge due to the loss of business that the crisis has cost them. With these new loans and more support from the banks the feel is that things may be leading back on track for the future.