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| Version 6 | Version 7 |
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| Darling to press banks on lending | Darling to press banks on lending |
| (about 1 hour later) | |
| The UK's banks have insisted that lending to small firms is continuing to rise, as they prepare to meet the chancellor later to discuss the issue. | The UK's banks have insisted that lending to small firms is continuing to rise, as they prepare to meet the chancellor later to discuss the issue. |
| In its latest figures, the British Bankers' Association (BBA) said total lending to small companies rose £366m in June, up from May's £133m increase. | In its latest figures, the British Bankers' Association (BBA) said total lending to small companies rose £366m in June, up from May's £133m increase. |
| Alistair Darling has said he is "extremely concerned" that banks may be charging firms too much for loans. | Alistair Darling has said he is "extremely concerned" that banks may be charging firms too much for loans. |
| But the BBA's chief executive Angela Knight denied this was the case. | But the BBA's chief executive Angela Knight denied this was the case. |
| The BBC's Nil's Blythe said that the statistics had been "misleading" and that lending to non-financial businesses had fallen last month, while the overall lending trend was "emphatically downwards". | |
| Is bank lending to business falling? | |
| Banks 'are lending' | Banks 'are lending' |
| The chancellor, who is meeting bank bosses at the Treasury on Monday afternoon, said he was concerned that the cost of loans to small firms had risen in recent months, despite the UK's record low base interest rate of 0.5%. | The chancellor, who is meeting bank bosses at the Treasury on Monday afternoon, said he was concerned that the cost of loans to small firms had risen in recent months, despite the UK's record low base interest rate of 0.5%. |
| He added that banks had a duty to restore lending levels, and that the government did not rescue the banking sector "out of some charitable act". | He added that banks had a duty to restore lending levels, and that the government did not rescue the banking sector "out of some charitable act". |
| Ms Knight said the banks could not lend at 0.5% because they had to pay much more than that for the funds they themselves borrowed in the wholesale money markets. | Ms Knight said the banks could not lend at 0.5% because they had to pay much more than that for the funds they themselves borrowed in the wholesale money markets. |
| She said the wholesale price of money was about twice the base rate. | She said the wholesale price of money was about twice the base rate. |
| "As far as the major banks are concerned they are lending, and increasing their lending," added Ms Knight. | "As far as the major banks are concerned they are lending, and increasing their lending," added Ms Knight. |
| It was right that firms should be able to demonstrate that loans could be repaid before banks would lend to them, she said, adding that loans were assessed on a case-by-case basis, and that some business plans did not stand up to scrutiny | It was right that firms should be able to demonstrate that loans could be repaid before banks would lend to them, she said, adding that loans were assessed on a case-by-case basis, and that some business plans did not stand up to scrutiny |
| "There will be difficult judgements at the edges and that's why it's important to keep close to the [bank] manager and get that business plan right." | "There will be difficult judgements at the edges and that's why it's important to keep close to the [bank] manager and get that business plan right." |
| Unfair rates? | Unfair rates? |
| Stephen Alambritis, chief spokesman for the Federation of Small Businesses, said the chancellor was "quite right to haul in the banks". | Stephen Alambritis, chief spokesman for the Federation of Small Businesses, said the chancellor was "quite right to haul in the banks". |
| "It is hugely important that Mr Darling keeps tabs on the banks to ensure they are lending money to firms, and at fair rates," he said. | "It is hugely important that Mr Darling keeps tabs on the banks to ensure they are lending money to firms, and at fair rates," he said. |
| "Firms need to be able to reap the benefits of the historically low base rate." | "Firms need to be able to reap the benefits of the historically low base rate." |
| And the British Chambers of Commerce (BCC) said that banks needed to be transparent and open about their approach to lending to small firms. | And the British Chambers of Commerce (BCC) said that banks needed to be transparent and open about their approach to lending to small firms. |
| "It will be business that drives the UK out of recession, but that can only happen if the banks are prepared to play their part," said the BCC's director general David Frost. | "It will be business that drives the UK out of recession, but that can only happen if the banks are prepared to play their part," said the BCC's director general David Frost. |
| "I am still hearing too many stories of small businesses being unable to access appropriate financing." | "I am still hearing too many stories of small businesses being unable to access appropriate financing." |
| A number of banks have needed emergency funding from the government because of the credit crunch. | A number of banks have needed emergency funding from the government because of the credit crunch. |
| These include Lloyds Banking Group, which owns Halifax and Bank of Scotland, Royal Bank of Scotland (RBS), which owns NatWest, and Northern Rock. | These include Lloyds Banking Group, which owns Halifax and Bank of Scotland, Royal Bank of Scotland (RBS), which owns NatWest, and Northern Rock. |
| Others, such as Barclays and HSBC have not needed any government cash. | Others, such as Barclays and HSBC have not needed any government cash. |
| NatWest said that it had made £3bn of additional lending available to small and medium firms - and had produced a guide to give firms an insight into what it expected customers to have prepared when they came to discuss getting a loan. | NatWest said that it had made £3bn of additional lending available to small and medium firms - and had produced a guide to give firms an insight into what it expected customers to have prepared when they came to discuss getting a loan. |
| "We genuinely understand the challenges they currently face and we have responded to their feedback," said chairman of business banking, Peter Ibbetson said. | "We genuinely understand the challenges they currently face and we have responded to their feedback," said chairman of business banking, Peter Ibbetson said. |
| Are you facing financial difficulties running your small business? Have you had to lose your business? Tell us your experiences using the form below. | Are you facing financial difficulties running your small business? Have you had to lose your business? Tell us your experiences using the form below. |
| A selection of your comments may be published, displaying your name and location unless you state otherwise in the box below. | A selection of your comments may be published, displaying your name and location unless you state otherwise in the box below. |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |