HM Treasury

Financial services

Non-bank lending

12 January 2010

Discussion paper on developing non-bank lending channels for UK businesses

HM Treasury has released a discussion document on developing non-bank sources of finance for UK businesses.  The document seeks views on the barriers to more diverse financing for firms with the intention to introduce proposals for reform later in the year.

The Government has taken a number of steps to support responsible lending, to ensure that the supply of credit meets recovering demand from creditworthy businesses. This discussion paper looks at non-bank lending channels, and explores the issues and options firms face in obtaining debt finance from non-bank lenders.

UK firms have historically relied largely on banks for lending. While non-bank channels play a role in the financing of UK corporates, it is less so than in the US. Developing non-bank lending channels would help to improve the future resilience of the economy in the face of financial shocks, by providing an accessible alternative source of credit for businesses.

HM Treasury, working closely with the Bank of England and other stakeholders, is exploring the different factors that could impact access to non-bank lending channels. In particular, we will focus on:

The Treasury is seeking feedback from interested parties, particularly the investor and business communities including: investors that have recently invested in or foresee themselves investing in UK corporate debt; and businesses that currently seek or who could potentially seek non-bank finance in the future.

Responses and enquiries

If you wish to respond to issues raised in this discussion paper or raise an enquiry about the scope of the discussion, please email: nonbanklending@hmtreasury.gsi.gov.uk

Telephone enquiries: Richard Holmwood on 020 7270 5884 or Thomas Hemingway on 020 7270 6097

Comments are invited by 14th February 2010.

Media links

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