Project Merlin is not achieving one of the core parts of what it was designed to do – namely increasing the amount of money the major banks should be lending to SMEs.
Lending to small business for 2011 reached £74.9 billion, which was some £1.1 billion short of the target that had been agreed just over a year ago. Now, while £1.1 billion out of a £76 billion target may not seem like a big deal – after all, it is only 1.45% - we have to consider the actual sums involved. £1.1 billion in anyone’s language is a huge amount of money and I’m sure there will be businesses up and down the land who would have welcomed a very small amount of this being lent their way.
I think the bank lending picture will look like this for sometime to come may be even into 2013.
Fact: Businesses are going to have to seek alternate sources ow business finance if they are wanting to raise funds for their business.
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