Banks 'should not be alone in business lending'

24 November 2011

Banks should no longer be relied upon as the only source of lending for smaller companies, leading groups in the business industry believe.

The British Chambers of Commerce (BCC) and the London Stock Exchange (LSE) have both spoken out in support of research urging the government to improve liquidity in this sector by implementing a period of "credit easing", the Daily Telegraph reports.

Innovation think-tank Nesta has led a report in which the Conservative-Liberal Democrat alliance is called on to allow savers to invest in the business bonds of small and medium-sized firms.

This, the study indicates, would help such companies in their quest to secure capital as being granted funds from banks is not easy at present.

And David Kern, chief economist at the British Chambers of Commerce, thinks this would relieve some of the pressure both financiers and businesses are under.

This comes after Sir Roger Carr, president of the Confederation of British Industry, called for an end to banks being vilified following the recession.

By Gary Cooper

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