Comments : What do you think of the Funding for Lending scheme?
The Funding for Lending scheme was launched today which involves the Government injecting £80 billion into the economy which is aimed to increase mortgage lending and smaller business loans.
The Funding for Lending scheme was first announced in June but met a lot of criticism from industry experts who believe that the funding wont reach those who need it the most. The scheme will offer cut price loans to banks and building societies which are expected to make the money available to the public through mortgages and small business loans.
The money for the Funding for Lending scheme is from the Bank of England and is being lent for a period of four years at just 0.25% per year which is below the market rate. However, if banks or building societies lending decreases between now and the end of 2013 they will be changed between 1% - 1.5%.
The Funding for Lending scheme is designed to create 10% deposits for house buyers along with cutting of deals for those who have larger deposits. Unfortunately, the industry experts do not see the money being lent to those who need it the most with the banks and building societies making the most of the scheme without actually increasing their lending.
According to the national chairman of the Federation of Small Businesses, almost a third of small businesses or four out of ten small firms are refused credit and he is hoping that this scheme will greatly benefit the small business sector.
Are you sceptical about the Governments latest scheme to help the economy or do you think it will make a real difference and boost the ever suffering housing market?
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