Business urges Chancellor to 'keep up the pressure' on bank lending

Business groups have welcomed Chancellor Alistair Darling's recent meeting with the British Bankers' Association, regarding a shortage in lending to small businesses.

The Chancellor expressed his concerns that banks are not making sufficient funds available to small firms, and that they may be charging too much for credit.

The Forum of Private Business (FPB) gave a cautious welcome to the Chancellor's comments, but warned that many of the problems being encountered by small firms are a result of the fact that applications are decided by centrally-prescribed criteria.

The FPB believes that applications should instead be considered on a case-by-case basis, by local bank managers.

Chris Gorman, FPB spokesman, said, 'We want to see a return of the old-fashioned relationships between small businesses and their local bank managers in order to improve the flow of finance to firms that deserve it at this crucial time'.

Meanwhile, the British Chambers of Commerce (BCC) called on the banks to be 'transparent and open' about their approach to lending to small firms.