Banks' promise on lending should be welcomed

The promise by major banks to increase lending to small businesses should be welcomed by pub operators that have struggled to obtain finance.

That's according to specialist financial broker Christie Finance, in response to the banks' promises to make available £76bn to small and medium businesses in 2011 - up from £66bn in 2010.

It follows a series of discussions with the Government known as "Project Merlin" and involves Barclays, HSBC, Lloyds Banking Group, RBS and Santander.

David Grant, head of UK business mortgages at Christie Finance, said: "Given our 2010 experience of increased year on year activity, we would hope the majority of this £76bn is directed towards new transactional business and not just simply re-priced, refinanced and re-cycled existing small business debt.

"Much of last year's lending was just that and thereby enabled the banks to conveniently label it 'new' lending."

New lending​

Simon Hughes, UK managing director at parent company Christie + Co, said: "We very much hope that a proportion of this new lending will free up some of the pent up demand from potential business purchasers in our sectors.

"The provision of finance remains the single largest obstacle to a sustainable recovery in our markets and the announcement today will be welcomed by existing operators and new entrants alike."

Christie Finance said that despite lending criteria remaining tight, bank lending eased in 2010, with the company able to secure funding for 11% more businesses during the year compared to the previous 12 months. It helped secure funding for nearly 150 businesses and individuals during 2010.