If you look at the coverage in the media of the lack of success of the Funding for Lending Scheme, it seems that it is just another opportunity to kick the banking profession for not lending to small businesses.
My experience in talking to business managers at my local clearing banks is that they are willing to lend, albeit under tougher conditions than may have applied in the past, but that businesses do not want to borrow. I hope that this is because the businesses that are now operating in the micro business sector are those that have learned the hard way that control of costs and prudent financial controls are better than borrowing.
They are therefore not only not borrowing new money but paying back any loans they may have as fast as they can.
All the scheme is doing is reducing the cost of mortgages not lending to business.