European Investment Bank denies claims of small business funding cuts

 

According to The Telegraph, the EIB, which provides discounted funding to high street banks which can be then passed onto business customers, is "tightening a £2bn credit line for small businesses" by "changing its terms and making less money available".  

 

The newspaper quoted a "bank source" who said: "This is a source of funding we really value and it has benefits we can pass on. We categorically want that funding. But there is not as much money available this year and some of the terms have changed."

 

But responding to the claims, an EIB spokesman told BusinessZone.co.uk: "We've got a strong partnership with a number of UK-based banks to provide funding for SMEs, which is continuing and being regularly renewed. From our side there's a very strong commitment to SMEs and we see that continuing. 

 

"In terms of availability, as we've seen this week, we renew the funding available to UK banks with a track record of SME funding. When they've finished lending one amount, we'll lend the next. It can be £200m or £150m, that reflects more on the time it takes to get the money out the door which in turn reflects the demand from SMEs at the given time. 

 

"From our side, both in the UK and across EU there's very strong funding and that may well increase if the European finance minister requests it." 

 

Earlier this week, the EIB announced a new £150m funding initiative with Lloyds TSB, the third time the EIB has partnered with the bank. It is believed the organisation will also soon unveil a new funding package with RBS worth around £250m.