No support for small firms

Published:  14 July, 2009

LONDON: More evidence is emerging that government is failing to provide small business loans, a central plank of its response to impact of the recession.

Businesses received 2360 loan guarantees worth £177.8m under government small business loan schemes this year, significantly less than the previous year and far below the scheme's £360m budget.

The latest Bank of England figures show that new lending to companies continued to contract in May, following a fall in April.

Business groups said the loan guarantee lending figures added to concerns that while government and the banks said that lending was taking place, the reality on the ground was different.

David Frost, director general of the British Chambers of Commerce, said he had concerns over banks’ lending and called for detailed monthly statistics to be released by government to allay fears.

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