The Project Merlin banks are on track to meet their lending commitments this year, the British Bankers' Association (BBA) has revealed.
The BBA said the five banks (Barclays, HSBC, Lloyds Banking Group, RBS and Santander) lent UK companies £100.4bn in the first half of the year, with £37.4bn being lent to small businesses.
Under the Project Merlin deal with the Government, the banks pledged to lend firms £190bn this year, of which £76bn was earmarked for small and medium enterprises (SMEs). A spokesman for the Merlin banks said: "The first half-year performance demonstrates the banks' commitment to providing businesses with the financial support they need to invest and grow and the significant progress made this year.
"The banks' efforts to encourage customers to come forward with borrowing proposals are set against the overall economic environment, which remains challenging, and business demand for credit, which remains weak."
This comes in the week that financial secretary to the treasury, Mark Hoban MP revealed that deregulatory amendments to the EU Prospectus directive have come into force a year early. This is to help small businesses access finance more cheaply.
SMEs will now be able to raise equity finance up to E5m before a costly prospectus must be produced.
Hoban said: "Reducing the regulatory burdens faced by business is vital in making the UK the best place in Europe to start, finance and grow a company.
"In order to play their part in the wider economic recovery, small businesses have to be able to access the finance they need — that includes making it easier for such businesses to tap into capital markets."
John Walker, national chairman of the Federation of Small Businesses, said: "More firms should look at equity finance as an alternative route to accessing credit."