Finance struggle for small firms goes on

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.