Small and medium-sized business have been “disproportionately affected” in their ability to access finance since the credit crunch, new research commissioned by the Government suggests.
According to research conducted by the National Institute of Economic and Social Research, a higher proportion of loan applications from smaller businesses have been rejected since 2008.
The findings are likely to increase pressure on banks to lend more after early figures published by the Bank of England revealed net lending had dropped since the Government’s flagship Funding for Lending scheme was launched in August.
Business secretary Vince Cable says: “Small and medium-sized businesses are still telling me that access to finance is their number one problem, preventing them from investing and growing.
“That’s why through the business bank we are developing a range of measures to provide businesses with the power to choose the type of finance that suits them.”
The Government’s ‘business bank’ initiative, designed to improve access to finance for SMEs, was formally launched yesterday.
The Government says £300m will be co-invested alongside private investors to address “gaps” in SME lending.
This money is the first deployment from the £1bn of new capital allocated to the business bank in the 2012 Autumn Statement.