Small businesses are struggling to obtain finance despite lending under Bank of England Funding for Lending scheme more than tripling during the third quarter.
The Bank said corporate credit conditions remained “relatively subdued” even though net lending by banks and building societies in the scheme increased to £5.8bn.
Of the four Yorkshire lenders involved in the scheme, Yorkshire Building Society drew down the most – £750m since the scheme started in July 2012 – feeding the society’s third quarter net lending of £758,000.
Skipton Building Society drew down £410,000 and reported third quarter lending of £236,000 while Leeds Building Society drew down £250,000 and lent £274,000 over the quarter.
Clydesdale, which includes Yorkshire Bank, hasn’t drawn down any money and was repaid more than it lent, resulting in a third quarter reduction in lending of £376m.
While mortgage borrowing conditions have been eased by the Funding for Lending scheme, small businesses – whose success is seen as key to economic recovery – are still struggling to borrow much-needed cash.
Last week, the household element of the scheme was scrapped altogether in an attempt to put the brakes on the surging property market, and the scheme further re-focused on SMEs.