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It has been proposed during a meeting between banking representatives and the
Government that banks will carry out a study of the levels of lending to SMEs in
an effort to improve business credit.
Data suggest that business loans are being repaid at a faster rate than new loan
agreements are being reached between the banks and SMEs.
The government is keen to see a boost to business lending as it wants private
sector growth to offset the large numbers of public sector jobs that are
expected to go over the coming years.
Although the previous government had set the bailed-out banks with lending
targets, the coalition has stipulated that those targets should be based on net
figures, which take loan repayments into account along with new loans, rather
than gross figures.
The government is preparing a green paper on business finance which may also
include details of plans to help businesses through equity investment as well as
bank loans.
In a joint statement following the meeting, chancellor George Osborne
and Business Secretary Vince Cable said: "We met the CEOs of the UK's biggest banks as
part of ongoing discussions on regulatory reform, and the availability of
credit.
"It was a very constructive meeting that will help inform the government's green
paper on business finance which will be published shortly."
Source: Credit
Control Journal
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