Banks are 'Slammed' by Government
Two banks, Lloyds Banking Group and the Royal Bank of Scotland, have been condemned by the Government for not lending enough money to small businesses. This is after a promise from them to do so after they were bailed out with public money.
The Public Accounts Committee (PAC) Report states that the "lending commitments are not being met and the Treasury is unable to explain this." The commitments are of £39 Billion promised to be lent to home owners and businesses. Furthermore the commitments are said to be legally binding, yet the Treasury can only do so much to encourage RBS and Lloyds to follow through.
In their defense, the banks say they are offering the money, but not many companies are asking for loans. Stephen Pegge from Lloyds Banking Group said they are even giving to 80% of those who ask. Still, others insist that it is the banks' fault as it is too difficult to get a loan from them.
Since loans have been hard to get, many small businesses have started managing themselves by going directly to their savings or even using costly credit cards to avoid the other obstacles involved in getting loans.
Commenting on this, Stephen Alambritis, from FSB says that the banks are allocation the money but are at the same time making it difficult for business owners by charging extra for the loans. On top of this there are many other fees that need to be paid to get new money such as: audit fees, review fees and facility fees. The federation, he says, is pushing to make the process simpler.
Another thing the federation has already managed to do is allow some smaller businesses to see a financial intermediary when dealing with banks should they want to do so. So rather than seeing someone who is unknown when dealing with the bank for lending, borrowing or charges, they may go through somebody they are familiar with.
Banks are 'Slammed' by Government
The Public Accounts Committee (PAC) Report states that the "lending commitments are not being met and the Treasury is unable to explain this." The commitments are of £39 Billion promised to be lent to home owners and businesses. Furthermore the commitments are said to be legally binding, yet the Treasury can only do so much to encourage RBS and Lloyds to follow through.
In their defense, the banks say they are offering the money, but not many companies are asking for loans. Stephen Pegge from Lloyds Banking Group said they are even giving to 80% of those who ask. Still, others insist that it is the banks' fault as it is too difficult to get a loan from them.
Since loans have been hard to get, many small businesses have started managing themselves by going directly to their savings or even using costly credit cards to avoid the other obstacles involved in getting loans.
Commenting on this, Stephen Alambritis, from FSB says that the banks are allocation the money but are at the same time making it difficult for business owners by charging extra for the loans. On top of this there are many other fees that need to be paid to get new money such as: audit fees, review fees and facility fees. The federation, he says, is pushing to make the process simpler.
Another thing the federation has already managed to do is allow some smaller businesses to see a financial intermediary when dealing with banks should they want to do so. So rather than seeing someone who is unknown when dealing with the bank for lending, borrowing or charges, they may go through somebody they are familiar with.
Banks are 'Slammed' by Government
