LONDON (Management Today) SMEs risk losing out as banks lent them just œ900m last year. Here?s some disappointing for the small business community this morning: figures released by the British Bankers? Association (BBA) show that British banks lent just œ900m to small businesses last year, which is less than a quarter of the average annual rate for the past five years. With politicians bleating on about how SMEs are the backbone of the economy, could it be time the Government put its money where its mouth is and forced the banks to start lending more? The BBA statistics show the total amount of outstanding loans to small businesses reached œ55.3bn in 2009 ? up from œ54.4bn the year before. Now we?re not mathematicians at MT, but this doesn?t seem like a particularly impressive growth to us, especially when compared with the previous five years during which the amount lent to SMEs grew by roughly œ4bn a year. And things don?t look likely to be much improved this year either, as although lending was up slightly at the start of 2010, it is thought that end of year figures will only show a brief improvement. Naturally, lobby group the Federation of Small Businesses (FSB) is incensed, and blames the banks for over-pricing loans. A spokesman told MT: ?At the height of the recession small businesses just weren?t being granted for loans and overdrafts they were applying for. Now what we?re seeing is that the cost of finance is still really high at a time where base rates are at an all time low. Anecdotally we know that some people are being charged 12% for their loans when interest rates are at 0.5%.? Ouch. So if small businesses aren?t getting the cash they need from the banks, where is it coming from? ?They are now dipping into their savings or going to friends and family to see if they can borrow money from them,? said the FSB spokesman, ?because it?s guaranteed it will be much cheaper.? It is no surprise then that the FSB reckons the small business community is losing faith in the banks. Especially those who aren?t lucky enough to have friends and family with a few extra grand to spare? For moe information, please visit: ¯