The article below discusses the struggle small firms are facing in raising finance due to the inability of banks to lend. However, if you are looking for finance we do have connections with some private investors and other sources who are looking for the right business to invest in. Please contact Adam Stronach on 01494 739500 / adamstronach@harwoodhutton.co.uk if you would like more information.
Small firms still struggling to secure lending - 20 August 2010
Small businesses are continuing to find it difficult to borrow money.
According to the Bank of England's latest Trends in Lending report, in the second quarter of the 2010 loans to SMEs fell by 2 per cent on the year.
Although a decline in demand has helped to fuel the squeeze on credit, small businesses, the Bank said, are still facing obstacles in securing affordable credit.
The report noted: "Contacts of the Bank's network of agents noted that credit conditions for smaller businesses remained tighter than for large corporates.
"Some major UK lenders expected demand from SMEs to remain muted in the coming months."
The report revealed that the gap between the official interest rate and the rates charged by lending providers on loans to larger firms dropped slightly between April and June.
However, the gap remained steady on loans to SMEs.
The Bank said that the gap reflected "heightened credit risk and the relatively high cost to banks of raising longer-term funding".