Business finance is set to increase for Small and Medium Enterprise in 2012, according to Lloyds Banking Group. The bank has pledged £12 billion, which will be made available for businesses with annual turnover below £15 million. It is hoped that the move by Lloyds will boost growth during the economic turmoil.
Lloyds is the first of the main banks to announce a lending target for 2012, creating suggestion that the move may encourage the government to set new agreements for the banking industry. According to the bank, net lending, which is the difference between money loaned and the amount of debt which is repaid, will remain positive in a bid to boost business confidence. The commercial group director of Lloyds, John Maltby said:
“There are no caps and no quotas- we will simply lend where the money is needed and will go beyond our commitment if the demand is there.”
Business finance to SMEs has reduced overall by 31 percent since 2009. SMEs have already had £76 billion of business finance, through the Project merlin initiative which saw the five main banks agree to a lending target for 2011. Last month, Phil McCabe spoke on behalf of the Forum of Private Business to call on the government for assistance, helping small businesses get the finance they need.
According to McCabe, although they are moving in the right direction, the government need to do more to remove the burden of taxation from small businesses, and in particular small start-ups.
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