James Mills is a web developer in the North East of England and founder of Refresh Teesside »
Mike Hughes is the Head of Business for the Evening Gazette. He will be blogging on all matters of importance to Teesside businesses - and some that are just worth knowing »
Jez Davison, business writer at the Evening Gazette, is a regular blogger on all things business - particularly finance, entrepreneurship and the state of the Teesside economy » 
Karen McLauchlan is the Evening Gazette's deputy business and features editor - with special interest in all things industry, property and arts related » 
Jeremy Middleton is a venture capitalist and the co-founder of FTSE-200 company HomeServe » 
Deloitte, which has 23 offices across the UK including Newcastle, is among the country's leading professional services firms » 
ClimateNE & Climate Change Schools Project support the move to a low-carbon, resilient economy and help businesses avoid risk and realise commercial opportunities. Posts by Jen Atkinson, Krista McKinzey and Harriet Thew »
Britain's biggest banks have missed their lending targets for the cross-section of businesses tasked with getting the economy moving again.
Small and medium-sized enterprises - or SMEs to the layman - represent more than 90% of UK companies and are seen as the engine of economic growth.
But those that need finance to expand are still being denied access to affordable credit by the high street.
Collectively Barclays, Royal Bank of Scotland, Lloyds Banking Group, HSBC and Santander UK failed by £2.2bn to meet their first quarter lending targets for SMEs.
That has added fuel to the argument that banks are hoarding cash to improve their balance sheets rather that lending it to viable business cases.
It has also raised questions over the strength of the Project Merlin agreement between banks and the Government.
The initiative was supposed to thaw the lending freeze that has gripped British business since the recession.
But critics claim it is nothing more than a talking shop that says a lot but does very little.
The notion that banks have shut up shop completely is flawed - to cite one example, Yorkshire Bank provided vital funding for the £3.3m extension to the Belle Vue Care Home in Middlesbrough.
But several firms have contacted the Gazette to express concern that they are being offered loans at extortionate rates - one at an eye-watering 25%.
The Government needs to create more competition on the high street to drive down prices and the Business Growth Fund is a step in the right direction.
It will provide equity loans of £2m-£10m to firms with a turnover of £10m-£100m, so it could be a potential lifeline for medium-sized firms looking to scale up their operations quickly.
The problem lies at the smaller end of the market.
Start-ups and established small firms are the businesses that need cash most.
And if the Government cannot persuade big banks to unlock the lending vaults, it must find a way to open up other routes to affordable finance for SMEs.
Over to you Dr Cable...
What do you think? Have you been affected by the lending freeze?
Contact Jez Davison at jez.davison@eveninggazette.co.uk
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