Pub finance brokers slam Government's new bank plans

By Gurjit Degun

- Last updated on GMT

Related tags Secretary vince cable Debt Finance Interest Government

Pub finance brokers slam Government's new bank plans
Pub finance brokers have hit out at the Government’s plans to put £1bn into setting up a bank designed to increase the amount of lending to small and medium businesses.

Last week, business secretary Vince Cable announced that the new bank will aim to attract private-sector funding, so that when fully operational it could support up to £10bn of new and additional business lending.

However David Grant, head of UK business mortgages for Christie Finance, said the initiative looks set to miss the point. He said: “Buying existing SME (small and medium enterprise) debt from the very banks applying unbelievably stringent criteria to loan applications from SMEs, doesn’t seem like a very effective way to increase lending to them.

“Government initiatives have so far ignored the vital fact that it is access to debt finance that is the real issue for small businesses. Lending criteria currently applied by UK banks is so stringent that it’s only the most credit-worthy applications that attract their support and it is disingenuous of the banks to say there’s a lack of demand.”

Grant added: “Government initiatives so far have concentrated upon discounting interest rates payable, which is all well and good, but interest rates are so low at present that any effect from a repayment discount is practically negligible on the average commercial loan.”

Paul Thompson of Acorn Commercial Finance added: “The Government has thrown a lot of money at high-street banks that are not lending. It’s a complete waste of time. I look forward to being proved wrong. There are small banks that are lending and they don’t get any help from the Government, they just get on with lending to the sector.”

Related topics Property law

Property of the week


£ 60,000 - Leasehold

Busy location on coastal main road Extensively renovated detached public house Five trade areas (100)  Sizeable refurbished 4-5 bedroom accommodation Newly created beer garden (125) Established and popular business...

Follow us

Pub Trade Guides

View more