The Bank of England has a short while ago produced stats expressing that loans to small companies are in sharp decline with companies repaying billions.

Bank of England figures confirmed that lending to small firms stays in uncertainty whereby firms are still paying back billions more than they are advanced. In fact it is now the fifth consecutive month that bank lending to small companies has lowered.
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It doesn't look good for small businesses trying to borrow through the 'depression'. However six months ago things were different as banks provided £300 million more in loans than was in fact repaid.

The declining economic predicament is additionally shown as banks are not making money readily available to clients - so much so that according to the Mail, "mortgage lending has plunged to a ten year low, leaving millions desperately struggling to find a home loan."
In addition the rate of gross mortgage lending droped greatly by up to 14 per cent last month contributing to the issues.
Business Secretary Vince Cable has also had his say on the matter and denounced the banks saying, "'I really do hope the banking community is listening. There is a potential train crash ahead.'

During the 12 months ending July 2010, small buinesses in fact repaid the banks £47 billion more than they attained in new loans. This is the clearest sign yet that firms are repaying the loans they take out. Nevertheless too little is being lent out in the means of new finances.

Mr. Cable was speaking at the recent Liberal Democrat conference in Liverpool where Deputy PM Nick Clegg also urged the banks to make finances more readily accessible. Mr. Cable compared the multi-million pound incentives with the bank's failure to loan to the UK's 4.7 million small and medium-sized firms.

As outlined by Mr. Cable, 'We [have] made it very clear that we were very concerned about the way the banks were performing in relation to lending to small and medium- sized enterprises. We spelt out that there were what we called sticks and carrots. One of the sticks is in relation to tax measures. It remains an option, particularly if the banks decide to spray out lots of money on bonuses and dividends at a time when small businesses are being starved, then the case for taking action is a compelling one.'

Deputy Prime Minister Nick Clegg added the new ConDem government are 'working flat out to get the banks lending again to small businesses', which he then went on to recount as 'the lifeblood of our economy'.

The Daily Mail themselves have launched a campaign entitled "Make The Banks Lend," in reaction to both the plight of small companies and following Mervyn King's criticism expressing his heavy despair about the result of the banks' response to small companies.

A recently available Bank statement on 'Trends in Lending' affirmed the situation is getting better for larger companies, but has not changed and continues difficult for smaller firms. This is also due to the interest rates charged which are reducing with big businesses but remaining the same for SME's.
Financial opinion and confidence makes for depressing reading. John Walker, chairman of the Federation of Small Businesses, suggested firms are 'still facing an uphill struggle' and warned, ' Demand for finance is at its highest as the economy enters recovery, something which the UK economy is tentatively moving through. Small firms don't have a huge amount of scope in accessing finance, unlike larger businesses.'

The call seems to be towards a higher level of competition in the banking field, which it anticipates will motivate larger competitiveness via reduced costs and better availability.

However The British Bankers' Association asserts they are doing their level best to benefit small businesses in this difficult economic period.

A representative The British Bankers' Association reported: 'The UK's banks have established a taskforce to report to the Government on exactly this issue - addressing how banks can further help small businesses through the recovery. We absolutely agree with the Government that small businesses are vital to securing the economic recovery and have committed to offering every assistance to viable businesses.'