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Fallon to probe SME debt servicing troubles

Business and construction minister Michael Fallon is looking at a piloting programme with SMEs to evaluate the problem of servicing bank debt.

Speaking in front of the House of Commons innovation and skills committee this morning, Mr Fallon said fewer SMEs are actually relying on the banks for new loans.

He said the main challenge the banks are seeing for SMEs is servicing debt.

“It is not so much the price, it’s the view of the banks that some of the debt has become much more difficult to service, and we are going to do some work with the banks on that; maybe do some piloting to see how serious a problem that is at the moment for SMEs.”

Mr Fallon has already threatened to “name and shame” banks who do not “step up” and lend to construction companies.

The minister has written to banks’ chief executives and the British Bankers’ Association to insist they lend more.

 

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