The figures, which will show if Barclays, Lloyds, HSBC, Royal Bank of Scotland and Santander are on target in lending the agreed £190 billion to businesses throughout 2011, will be published today by the Bank of England.
Back in February, in order to make funding more available for businesses that have been struggling during the economic crisis, the banks agreed that they would pledge £190 billion to British business under the Project Merlin agreement in 2011. This is compared with the £179 billion lent in 2010.
In the first quarter of 2011, lending is expected to collectively total £16.8 billion compared with the target of £19 billion, therefore a shortfall of around 12%.
Vince Cable last week said that he expected the banks to miss their lending targets and sent a warning to the banks that action would be taken by the Government.
“If the banks don't deliver, there are options open to the Government, including taxation,” he said.
However, the business secretary said that the banks would have the remainder of the year to increase their lending to meet the agreed amount under Project Merlin.
The Federation of Small Businesses says its members are continuing to struggle to get bank loans and other credit.
The Project Merlin deal was positive news for SMEs across the UK back in February. If the banks have not met their lending targets in the first quarter of 2011, let’s hope that the Government take action to ensure that these targets are met throughout the rest of the year and that funding is more readily available.
For more information, please visit www.twpaccounting.co.uk
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