Small Business News | Are banks misleading small firms?

The Telegraph recently reported that ahead of a government led launch to improve the flow of finance to, Vince Cable has accused banks of misleading small firms.

Despite  Royal Bank of Scotland (RBS) and Lloyds Banking Group both stating that loan application approvals stand at more than 80%, Cable is convinced that the reality is something quite different. Latest statistics from the BBA show that banks lent £500m in May to small businesses but this was less than they collected in repaid debts and withdrawn overdrafts. Therefore aalternatives to bank debt are being examined alongside tax benefits which may encourage private investors to back fledgling companies. A mere 1-2% of UK small and medium enterprises use equity finance as an alternative to high street banks so the option of recreating 3i – a private equity group that provided equity and debt for small, growing businesses – looks like a promising solution.

To read in full please visit the Telegraph website

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