FLS lending falls in Q2, BOE data shows

During the second quarter of 2014, 9 of the 36 groups participating in the FLS Extension made drawdowns of £3.2bn. Participants also repaid £0.8bn from the first stage of the FLS, taking total outstanding drawings to £45.7bn.

Net lending to SMEs fell in the second quarter of 2014, but at -£0.4bn was less negative than in previous quarters. Net lending to large companies was -£3.5bn. Net lending to all businesses, including eligible non-bank credit providers, was -£3.9bn.

Duncan Kreeger, director of lender West One Loans, comments:

“The British economy needs funding for growth.  And despite having a bigger total budget than the UK’s armed forces, Funding for Lending is still not marching in step with our real economy.

“That’s a bit disappointing, since funds at the biggest lenders are still not going in the right direction.  Funding for Lending may have had an enormous impact on the cost of some types of credit.  But two years on, and FLS is running the risk of ending with a whimper.

“By stark contrast, the real financial revolution of the last two years has been alternative funding models, not cumbersome and expensive schemes which give the most support to the most established players.”