Funding Circle responds to Funding for Lending figures
29 May 2014
Following the fall in lending to small businesses via the Funding for Lending scheme in Q1, James Meekings, co-founder of Funding Circle, commented:
“It’s surprising that lending has fallen given the recent refocusing of the scheme towards businesses. It’s clear that small business lending needs to be reformed and technological innovation is the answer.
“Traditional and alternative sources of finance are complementary and should work together to ensure that as many small businesses as possible can access the finance they need to grow. 50% of businesses interested in a bank loan don’t even get to the formal application stage and 61% don’t reach the formal rejection stage. By signposting to alternatives way before a bank rejection letter, more small businesses will become aware of the choice that is now available to them.”
Net lending to businesses by FLS Extension participants was -£2.7bn in the first quarter of 2014. The fall was concentrated in lending to large companies; net lending to small and medium-sized enterprises (SMEs) was -£0.7bn. The Bank of England figures can be found here.