FSB: Lending drop is very worrying

Friday, February 19th 2010

Business lending figures are "very worrying", according to one expert.

National chairman of the Federation of Small Businesses (FSB) John Wright revealed that figures in the Bank of England's Trends in Lending report show a large contraction in lending.

The sum is said to total more than £4 billion, but businesses must be able to access credit and finance when exiting the recession, Mr Wright added.

He stated: "The Federation of Small Businesses is calling for more alternative sources of finance to be provided locally through Regional Development Agencies, local councils or Post Offices."

It is hoped that this would increase the choice of finance for business owners, Mr Wright continued.

Released yesterday (February 19th), the Bank of England's report said that the contraction of British business lending in December was the fastest ever pace.

A year-on-year fall in the stock of loans was also noted to be the biggest drop since 1999, when the series began.