I
have written in the past about the various attempts being made by this
government to encourage lending to small businesses. My original contention was
that this was only helping home buyers with cheaper mortgages and not small
businesses.
My
views are reinforced by the fact that mortgage lending in August is recorded
as 28% higher than in the same month
last year. Looking behind the figures this actually seems to be that people are
in fact extending their homes and then re-mortgaging instead of moving. This
only goes to prove that home-owners are getting as financially aware as small
business owners.
In
the same way as micro business owners are vowing never to again be in thrall to
the major banks who can call in a loan or overdraft at a moment’s notice and
risk ruining their business, so now home owners are saying, OK you want to lend
us money at much cheaper rates, we will borrow but we will no longer do it in a
way which puts us at the risk of re-possession. We will borrow because we have
to but we will get the cheapest rate possible and switch if we get a better
deal. The government tells us to do so with the energy companies, so don’t be
surprised if we do it with the mortgage lenders.
There
is however one further statistic that worries me and also doesn’t help my
argument – credit card debt continues to escalate. Is this people who don’t
have their own homes or businesses?
Written by Keith Powell, Colbea Business Advisor.