Government To Encourage Business Loans
One of the biggest criticisms of the Government and Banking sector in the UK following the recession and banking crisis, is the lack of support being shown in offering new business loans to small and medium sized companies.
In an attempt to encourage the finance sector to offer more loans to businesses, Vince Cable and George Osbourne of the Coalition Government have published a paper, which highlights the need to provide business loans to those who need them, along with possible solutions from the loan industry, as well as the Government, in making finance for business loans available.
The paper, which is entitled “Financing a Private Sector Recovery”, discusses the options which are available for business loans and where the government should step in with additional support in those areas where the market is particularly weak.
The paper talks about the possibility of firms restructuring their existing business loans and making bank loan applications simpler, as well as encouraging more competition between lenders. The emphasis is being placed on the loan industry leading the recovery, rather than the government waving the proverbial big stick.
Vince Cable said “If we don’t anticipate and tackle finance barriers now we could face a big problem in the future. Left unchallenged, a lack of accessible finance for businesses could prevent the recovery accelerating.”
“I’ve heard the problems businesses are facing in getting bank loans up and down the country. They need innovative ways to access finance from other sources to grow our firms and economy. That’s why this green paper is so important as we look to help viable firms get the money they need.”
The British Bankers Association (BBA) commented on the paper by saying that banks were already providing business loans to firms and that lending was continuing to increase. They also commented that businesses were currently repaying their existing loans, rather than thinking about taking out new ones.
