Barclays Business has changed its lending
policy and will no longer provide asset finance to companies with
turnover less than £5m a year.

A Barclays spokeswoman said that the need for
asset finance among larger companies was not shared by its smaller
customers, adding: “We will continue to offer asset finance to
Barclays Corporate customers where we are satisfied that the asset
provides suitable security. With SMEs of less than £5m turnover, we
have seen a change in the asset finance portfolio and are
reflecting this with changes to our overall proposition for new
finance requests.”

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The bank said it continued to support small
and medium-sized companies with more suitable lending solutions,
including working capital through overdrafts, the
government-supported Enterprise Finance Guarantee, and loans and
commercial mortgages.

Opting for plain vanilla loans for smaller
companies may be seen by some as missing the point of asset
finance, which aims to offer a different proposition and not to be
a substitute to other forms of lending.

A market commentator said: “It may be more
cost effective to offer another type of finance, or perhaps all
finance for SMEs will go through the branch network, meaning that
the relevant staff members need only to be trained about simpler
products.”

In 2010 Barclays increased SME lending,
against an overall market decrease. The bank lent £35bn to SMEs in
2009, and by October 2010 it has surpassed that figure. “We
approved four out of five loan applications and twice a minute in a
working day we agreed a business loan,” Barclays’ spokeswoman
said.

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UK banks Barclays, HSBC, Lloyds Banking Group,
RBS and Santander agreed on February 9 to increase lending to SMEs
by 15 percent over 2010 levels.