Just come across this story from the FT, published earlier this month. Apparently plans are afoot to establish a retail bank specifically for small and medium-sized businesses struggling to obtain funds.

“The group intends to set up a business based around traditional banking methods, drawing in deposits to cover its lending, rather than relying on more risky funding methods, and maintaining a conservative balance sheet.

The bank plans to attract deposits from customers prepared to save relatively large sums in return for attractive interest rates, with minimum deposits set above £20,000.

It would use the capital to lend to businesses that have been unable to secure funds because of the credit crunch.

Small to medium-sized groups have been hit hard by tightening loan criteria, in spite of government efforts to encourage lending to this sector. The launch also chimes with a government desire to encourage competition in the banking sector.”

It’s likely to take a up to a year before the bank is launched as discussions are still at an early stage – interesting, though. You can read the full story here: New UK bank to focus on smaller businesses.

Source: Microsoft Small Business