Lenders withdraw £2bn from FLS in Q3 - but SMEs not feeling the benefit

During the third quarter of 2014, 11 participants made withdrawals of £2.0bn in total, and participants also repaid £0.1bn from the first stage of the scheme.

For large companies, lending conditions have improved - more respondents to a Deloitte CFO Survey reported that credit was cheap and available in 2014 Q3 than at any time since 2007. Net lending by FLS Extension participants to SMEs was slightly negative in the third quarter of 2014, but at -£0.1bn was less negative than in previous quarters.

Commenting on the Funding for Lending data for Q3, Samir Desai, chief executive of Funding Circle, said:

“Funding for Lending is still not helping enough small businesses access finance. Net lending is flat and 86% of small businesses that use the Funding Circle marketplace believe the scheme is not working for them.

“Whilst Funding for Lending figures continue to remain muted, marketplace lending is growing exponentially. Based on today's figures, Funding Circle is now the 4th largest net new lender to businesses in the UK and has now helped more than 6,000 businesses access the finance they need to grow. We are witnessing a changing of the guard in the business lending space.

“More banks are not the answer. Online marketplaces add diversity to an old system badly in need of modernisation are and provide a better service to small businesses."