Adam Tavener, Chairman of Clifton Asset Management, parent company of Pensionledfunding.com, said: “The banks themselves have warned that this extension will not clear the credit bottleneck on its own and it is our view that this further inducement to pass on the benefits of subsidised lending to SMEs will only have a marginal effect.”
“We also feel that rather than including alternative funding providers in the FLS, the government needs to look at new initiatives to promote alternative funding directly to the small business community. At the very least, it should be encouraging larger funders to work more closely with the alternative funding sector to improve the flow of credit.
“Blaming a lack of demand for credit on the failure of the FLS is at odds with our current experience. Since the beginning of the year, we have seen a rise of around 55 per cent in pension-led funding enquiries and, along with an increase in peer-to-peer lending and even crowd sourcing, it is clear that with bank lending to SMEs falling by £4.8bn for the last quarter, businesses are seeking alternatives to traditional funding sources.”
Louise Beaumont, co-founder of the non-bank lender for business Platform Black, added to these concerns saying: “We’re particularly pleased to see non-bank finance providers included in the latest version of Funding for Lending and we applaud the Treasury and the Bank of England for doing all they can to ease the bottleneck that clearly exists in the credit system.
“However whilst we’re delighted to see the scheme opened up to alternative funders, our concern remains that Britain continues to suffer because it has a very highly concentrated banking system – around 90% of all business finance goes through a handful of giant banks.