August 28 2014.

- British banks and building societies drew down £3.2bn in Q2 2014 from the Funding for Lending Scheme

- Net lending to SMEs fell by £435m in Q2 2014

Commenting on the Funding for Lending figures, published by the Bank of England today, John Longworth, Director General of the British Chambers of Commerce (BCC), said: “Although the decline in lending to SMEs was less than in the previous quarter, Funding for Lending continues to disappoint. Despite the welcome re-focus towards SME lending, the real test for the scheme has always been whether it is able to get credit flowing to young and fast-growing businesses. Unfortunately many of these firms remain frozen out when it comes to accessing the finance they need to fulfil their potential. The Business Banking Insight (BBI) confirms that many SMEs are unhappy with the level of service they receive from their bank.

“These figures reiterate that much more needs to be done to fill major gap in the provision of SME finance in the UK, including increasing the role of equity and bond markets and delivering a Business Bank with a greater capital base than under current plans and the ability to lend directly to businesses.”