Laughing all the way to the bank?

So, Alistair Darling has held a meeting with the major banks to try and encourage them to ‘do their bit' - to lend more money and be more flexible with businesses on important issues such as overdrafts and the price that they are lending at.

I won't hold my breath.

Bear in mind that only last week the British Bankers Association (BBA) released figures that suggested that banks are lending more to companies now than they were last year.

The BBA figures showed that 45,403 new business accounts were opened in March - more than the average monthly number in 2008 of 43,773.

These figures may well be valid, but they negate an important point. Banks may be lending, but it is the price that they are charging for this, and their inflexibility when it comes to overdrafts and penalty payments that are causing small firms real issues. What with a £37bn bail-out by the government and inflation being set at a historic low of 0.5% banks need to do more to help UK businesses.

I have heard countless anecdotes from small business owners, who despite a long (and solvent) history with their bank have been fined for going into their overdrafts by mere pounds and whose perfectly reasonable request for an overdraft extension has been turned down by their bank.

Businesses in the UK need support from their banks, they need flexibility and some common sense so these companies can begin taking the steps that will bring substantial money into their firms again.

It is when the majority of SMEs in this country start making a good profit that we will know that the recession is well and truly behind us. And, for this to happen, the banks have to provide adequate support.