The HM Treasury announcement concerning extensions to the Funding for Lending scheme has been met with satisfaction from the Federation of Small Businesses (FSB).
The treasury has announced that the Funding for Lending scheme will be extended by a year to January 2015. The formula has also been changed for banks so it is heavily geared towards SME lending – ie the more they lend to SMEs the more they can borrow.
Non-banks lenders (asset based and invoice financers only) can now access the scheme: a measure seen as good news by the FSB as they will probably be more willing to take a risk when lending.
Gordon Millward, regional chairman of the FSB, said:
Reviewing the Funding for Lending formula so more and cheaper loans are available to small businesses is good news as is the extension to the length of the scheme.
The FSB has found that lending costs have slowly started to come down and more firms are finding loans at reduced costs, but there are still plenty of businesses that cannot access finance in the first place.
We hope that the non-bank lenders that will be able to use this scheme and have different risk appetites might bring about a real increase in small business lending.