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Commercial Finance: News
29
Mortgages
Increase in small
for
Business
business lending
Lending to small businesses rose are increasing their support for banks also take longer to get
announces
by £391 million in June, whilst small businesses. Banks lend their money back as they help
almost 50,000 new small when and where borrowers are customers by rescheduling
business banking relationships likely to be able to repay their repayments.
return of
were established, according to debts. Commercial customers "Banks are paying relatively
the BBA. have to demonstrate loans can be more for their money as a result
Commenting on the data, BBA repaid and banks will only be of both competition for savings
funding
statistics director, David Dooks, able to lend where businesses and scarce and expensive
said: "These figures provide more have enough paying customers wholesale funding. The cost of
evidence of the high street banks' coming through the door to funds the authorities made
Buy to let and commercial broker support for small businesses. finance repayments. available through the Credit
Mortgages for Business, has Structured term lending rose by "The cost of borrowing reflects Guarantee Scheme is also
announced it has secured access £366 million in June, while more than the Bank of England expensive at a time when returns
to mortgage funding for HMOs, deposits and numbers of new base rate. Banks costs have gone on loans - arising from the very
freehold conversions and limited business relationships continued up and there is less left to lend. low interest rate environment -
companies. to hold up, perhaps reflecting Government imposed capital are lower."
The funding comes through improved business confidence in requirements mean banks are High street banks’ lending to
Aldermore, which has named a trading conditions." already holding liquid assets and small businesses also rose in May
select panel of brokers, one of The BBA has also tried to capital at around twice - by £153 million and deposits
whom is Mortgages for Business, explain why it costs banks more internationally agreed levels and increased by £250 million,
who will have exclusive access to to lend to small business. It said: this ties up funds which cannot according to the BBA. Over
the funding. "Banks continue to be the major then be lend out as well. More 45,000 new small business
Mortgages for Business can source of business finance and people default in recessions and banking relationships were
now provide landlords with
access to funding for Houses in
Multiple Occupancy, Freehold
Conversions and properties held FLA calls for responsible regulation
in the name of a Limited
Company - since Aldermore has The Finance & Leasing Association recognised that regulatory year. The large volume of new
said it will consider the majority (FLA) has welcomed the OFT’s intervention in financial services consumer credit regulation (both
of Commercial and Residential recognition that regulatory markets needs to be proportionate. from Brussels and the UK
property types and will lend to intervention in financial services This is an essential requirement if regulators), along with the
Limited Companies. markets needs to be proportionate. we are to sustain a competitive continued freeze in the wholesale
David Whittaker, MD at Responding to the OFT's market with real choice for funding markets are combining to
Mortgages for Business said: “We Financial Services Plan published consumers. put extra pressure on lenders just
know landlords and property during the Summer, Fiona Hoyle, “The consumer credit market is when they are being called upon to
investors are struggling to find head of consumer finance at the already contracting. Overall help reinvigorate the economy.
finance for HMOs and freeholds FLA, said: "We are encouraged that consumer lending has fallen by Responsible regulation is as
split into several self-contained the Office of Fair Trading has around 20 per cent over the past important as responsible lending."
units. Many of the lenders who
were happy to lend on this type
of property have taken a leave of
absence from the market during
Businesses offered free credit checking
the credit crunch. This has left
many investors high and dry Lloyds TSB Commercial Finance invoice flow through Commercial Tracey Gills, credit manager at
when it comes to mortgage is offering customers free, online Finance's factoring operations, Lloyds TSB Commercial Finance,
finance. Now – finally – there are credit rating facility, Firstcheck, which is one of the biggest in the commented: "In tough trading
some other options. In the to identify risk of cash flow issues UK. conditions, late or non-payment
residential investment arena, caused by late payment. The decision to provide free by customers can have a
funding options are improving; if The service provides credit access to Firstcheck follows the disastrous effect on cashflow and
you have a finance problem, if no checks on 3.5 million UK firms latest Business in Britain research is often the main reason why a
one else can help, Mortgages for and is used to determine carried out in June by Lloyds business begins to struggle.
Business can help.” payment terms or credit limits TSB, where nearly a third (30 per "Regular credit checking
But he added, “Access to these for new clients. cent) of companies reported enables a company to spot risks
funds may be limited so I am It also evaluates current cashflow problems, with 65 per within their existing client base
urging landlords and buy-to-let business payment performance cent citing late payment by and make contingency plans to
investors to act promptly.” data gathered from a daily customers as the main cause. deal with any defaults.”
www.mortgageintroducer.com September 2009 Mortgage Introducer
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