The Forum of Private Business (FPB) is calling on the government to put pressure on banks to address the lack of lending to small firms.

Proposals, submitted to the Commons committee inquiry ‘Government Assistance to Industry’ and the government’s green paper ‘Financing a Private Sector Recovery’, include:

• more discretion locally, with bank managers able to take into account other evidence from businesses such as recent orders when making lending decisions
  
  
• clearer definition of what should be expected from banks, with the new Bank of England regulator able to set specific timelines for lending decisions and there should be written feedback on loan rejections and the time for lending rejections to be appealed
  
  
• greater transparency to restore trust in the banking sector
  
  
• building momentum and dialogue generated by the Small Business Banking Forum
  
  
• more flexibility in the short term in some of the government’s schemes such as the Enterprise Finance Guarantee (EFG)
  
  
• make Information more readily available about government support to be made more to enable SMEs to make informed decisions.

The Forum’s finance director Nick Palin says: “The private sector and small business growth in particular is expected to lead sustained economic recovery but bank lending is getting worse getting steadily worse. Worse, even, than six months ago when the economy was still struggling under severe recessionary conditions.”