Business loans: Your views

Workers silhouetted in front of the Canary Wharf skyline, London
Image caption A deal with banks to increase loans to firms and limit bonuses has not yet been finalised

An agreement with the largest UK banks on lending, pay and bonuses has been announced.

Under Project Merlin, banks will lend about £190bn to businesses this year - including £76bn to small firms - curb bonuses and reveal some salary details of their top earners.

Small business owners have been responding to today's announcement and explaining how it will affect their companies.

Thomas Newman, Devon

My fellow business partners and I started a new social media business in 2009. By late 2009 we had grown our business to over 100 clients and had recruited four additional headcount.

But our banking partner refused to grant our company an overdraft, let alone a bank loan.

The stock answer as to why we weren't given a loan was because of the global crisis and that it was the worse climate for banks to lend money - nothing to do with the performance of our company.

I found this staggering and was extremely fortunate that our first year in business was positive.

We weren't given any guidance or assistance in what to do next.

We wanted to use the money initially for marketing and for trying to join associations to make inroads in terms of networking, as well as business running costs and staff costs.

We later asked for an overdraft as a buffer in case of additional costs of just £1,000 - but even that was rejected by the bank.

Their solution was for us to borrow from our credit cards and treat them as an overdraft.

Many of my friends who also had businesses, and like mine were under 30 years of age, were not so lucky and subsequently had to cease trading.

I hope that Project Merlin will provide enough of a stimulus to other young companies in the UK, and hopefully the message will be filtered down to the bank lenders.

Jon White, Wiltshire

I operate two successful and profitable businesses. I have approached my bank for a loan to finance my business expansion.

From the viewpoint of the bank, the loan would be very low risk - my credit history is spotless.

But the best rate I was offered was 11% which, in my opinion, is an extortionate amount.

It amazes me that the banks are more than happy to receive financial assistance from the government, yet they are unwilling to lend to customers at a sensible rate.

As a result, my business will suffer in the short term.

I think the problem is not so much a lack of credit, but rather the administrative hoops and terms that small firms are made to jump through.

Only time will tell if banks can be cajoled or forced into backing business growth.

Jason Flegg, Buckinghamshire

I own a small haulier company. I know that bank bashing has become very popular, but people need to realise they are not here to do us a favour.

Banks can only lend to viable businesses. Lending without proper checks is how the previous financial crisis came about; lending to people who were not able to pay it back increased the numbers of defaults.

I would rather our government commit to encourage businesses to become more self-sufficient, than push them to lend more money.

I think the key to securing funding is not only having a good credit rating but also a good relationship with your bank manager.

Our company is expanding and our bank has been able to help our firm to refinance.