I have written twice on the subject of the current Funding for Lending scheme, once to express cynicism and then a softening of that position giving some benefit of the doubt towards the major clearing banks.
I have now noted two pieces of news:
The scheme is reported as being responsible for banks launching competitive mortgage deals aimed at borrowers with small deposits.
The scheme is also reported as being responsible for recent cuts in interest rates on personal loans ranging from between £3,000 to £4,999 for one bank and between £7,500 and £14,999 for another.
So, we have the situation where participating banks are drawing down money against the scheme to fund cheaper mortgages (which I predicted) and personal loans (which I didn’t expect).
What can I suggest for my fellow small business owners who want a small loan to develop their business? If you are a Sole Trader with a good credit record you might be able to get a personal loan - but you had better say it is for a retirement party and not mention it is to try and develop your business so you can employ people on Job Seekers Allowance at the moment.
If you are a small private company – keep whistling!
Posted on behalf of Keith Powell.