Harnett Accountants Fulham – Bank Of England Plans To Increase Lending

Harnett Accountants Fulham brings you this report from the BBC Business News website, detailing new plans being rolled out by the bank of England to encourage banks to lend more to individuals and small businesses.

“Funding for Lending, the new Bank of England and Treasury initiative to boost bank lending to households and businesses, has come into operation.

The aim of the scheme is to increase bank lending by roughly £80bn, and banks and building societies will be able to access funds until the end of January 2014.”

source: full article

As accountants in West London, we see many small businesses and individuals who need access to business finance or mortgages, and over the last four years it has been increasingly difficult to obtain that finance. It’s hoped that by giving commercial banks access to cheaper borrowing (in the form of treasury bills), they will then be able to afford to lend more money to individuals and small businesses. However, there don’t appear to be any safeguards in place to ensure that the funds lent by the Bank of England are actually used to provide more lending to customers, only incentives to reward banks who do increase their lending with a very low interest rate.

However, this scheme could simply turn into a cheap and heavily manipulated source of finance for commercial banks, with very little or no extra lending to individuals or businesses required. Other critics also cite fears that the worsening Euro zone crises will simply cancel out any good that will come from this scheme completely. There is however some protection for tax payers built into this scheme, namely a way to ensure that commercial banks will have to take a haircut on any losses their incur instead of the Bank of England.

If you need help or advice with raising finance for your business, or advice about interest rates and loans, please contact Harnett Accountants Fulham, and we will arrange a free one hour no obligation consultation. Contact us through our website or call us on 020 8977 3883. Also you can follow us on Twitter, Facebook and Google+. Additionally, you can keep reading our daily blogs.


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