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Funding for Lending – here we go again

“If at first you don’t succeed, destroy all evidence that you tried”. I’m not sure how accurate that saying is but maybe it should be applied to the Funding for Lending scheme.

ASC were quoted again this week in the Financial Times announcing our scepticism of the scheme but the government still have faith that it could represent the Holy Grail for SMEs.

We are yet to be convinced of its potential. Lending to SMEs is declining and not because they don’t want to grow but because all the hurdles, conditions and the rates that banks put in place make it impossible for a business to borrow and remain financially efficient. The scheme may make it easier for banks to fund lending to businesses, but if they don’t want to lend or if they only want to lend with unfeasible conditions – the scheme will not change that.

Let us know if you think the Funding for Lending scheme has a chance or if it’s doomed to line the waste paper bin on top of the Enterprise Finance Guarantee and Project Merlin, both of which had similar conditions and failed.

We would love to hear what you think.

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