Banks insist they are open, so why will they miss their lending targets? Michael Taylor listens the mantra as the Better Business Finance roadshow hits Manchester.

Manchester was the destination on Tuesday of this week for the banks to meet with "small businesses" to trot out their mantra that they are "open for business".

The Forum for Private Business has to be commended for trying to get its story straight in this confused world of forked tongues and half truths. They have at least accepted the notion that the lending rules of the pre-credit crunch era have been ripped up, and that businesses should try and better understand what the new rules now are.

Fair play to the banks for making the effort to get out into the sticks and meet with the businesses they need to lend to – after all, it is their business.

But I sense I weariness on this topic now. The promise was of "80 small businesses from Manchester". I counted a much lower number than that, possibly even a tenth of that. Even a small business owner in Manchester willing to give an interview to BBC Radio 5 Live did so through a changed name and promise of anonymity usually reserved for the witness to a serious and violent crime.

It is a racing certainty that the banks will miss the lending targets the government have set them. This is despite the Enterprise Finance Guarantee scheme, which has been a popular measure that gives banks and customers some comfort.

Let’s look at some of the things the bankers had to say in their defence of the stance that they are genuinely open for business. Andy Grisdale of HSBC said credit committee approvals are running at between 80 and 90 per cent. Peter Ibbetson of Royal Bank of Scotland/NatWest said the average price of credit on their small and medium sized business book is running at 3.3 per cent.

Chris Sharkey of Santander said there was intense competition for good businesses, but that the levels of scrutiny now were much more rigorous and an antidote to the "easy money" businesses had been used to until recently – "we’ve been too clever by half in the past" he said.

Malcolm Evans from Funding Enterprise, who was on the panel to stir things up a bit, said the recession that brought to the fore some systemic problems in the funding of UK businesses. "You guys on the panel are all great. I’m just not sure your people are," he quipped.

None of them are wrong. None of them were telling lies. But the central truth behind all of it is the state of the economy, which is barely growing. Not enough companies want to borrow on any terms because their sights are set much lower; their ambitions are actually still focused on survival and used to non-existent growth.

Ibbetson conceded that for all the efforts his bank is doing with focused teams, positive messages and countering of the "fundamentally incorrect perception" that they don’t lend, that credit applications are 27 per cent down between the dark days of the early recession in early 2009 and the first quarter of 2011. The real perception is that it just isn’t worth bothering with.

A perception reinforced by a contribution from a real business in the audience – Steve Driver from SRO Solutions – who said: "It's a difficult exercise to go through".

Business conditions remain incredibly tough. You have to hope a stronger and fitter business base emerges from this and that the banks are ready to support them. If good is to emerge from the efforts of all of the banks to get their own house in order, to improve how they respond to requests to borrow money and to support business, then the time to judge it is certainly not now.

Any comments? Michael Taylor, Insider