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Small Businesses: Borrowing

Volume 508: debated on Monday 29 March 2010

To ask the Minister of State, Department for Business, Innovation and Skills what recent discussions he has had with representatives of high street banks on the cost of borrowing for small businesses. (322808)

The Department continues to collect SME lending data from the four main banking groups (Lloyds, Barclays, HSBC, RBS) on a monthly basis. The headline messages from the bank data returns—including cost of finance—are discussed at the Small Business Finance Forum, which meets quarterly, is chaired by my noble Friend the Minister of State for Trade, Investment and Small Business and attended by representatives from the high street banks as well as key small business representative bodies.

The Department's data show that generally, the cost of finance remains lower than in 2007 due to falls in the base rate, despite increases in bank margins. Fixed rate finance remains lower than in 2007 and 2008, and margins on variable rate finance in October 2009 remain at comparable levels to previous months.