Nationwide to delay small business lending

The government had hoped that business lending would start to increase and help to improve broader economic conditions but things are taking longer than planned and access to finance remains difficult.

Now Nationwide has announced it is to delay its launch into business finance lending until 2016, dealing a further blow to this entrepreneurs and others looking for funding.

Reports from the Financial Times confirmed that the UK's biggest building society put its plans to lend to SMEs on hold, with rumoured connections to tighter regulations as UK regulators are forcing lenders to hold more capital as a buffer, which could well be behind the decision to delay.

Nationwide only announced its plans to enter the SME loans market earlier this year but the decision to delay will no doubt come as a blow to the government's plans to speed up economic recovery.

A spokesman for the building society said: "We have previously said that it is our strategic intention to enter the SME banking market and that we will do this at the right time for the society and our members. That remains our intention."

Policy makers and lenders remain divided on how best to boost economic recovery, but access to finance remains a key issue in the debate. One of the latest points came form the business secretary, Vince Cable, who last month dubbed the Bank of England "capital Taliban" for their tight restrictions on lending which he claims "actually make it more difficult for companies to operate and expand … at this delicate stage of recovery".

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