Business lending slumps by biggest amount since records began

July saw net lending to UK businesses fell to its lowest level since records began, according to the Bank of England's latest 'Trend in Lending' report. The report also reveals that "the availability of finance remains more constrained for smaller companies". Some of the UK's major lenders told the Bank of England that small firms face tougher lending criteria than larger businesses because they are "less well diversified" and unable to withstand adverse conditions.

To read the full 'Trends in Lending' report go to:
http://www.bankofengland.co.uk/publications/other/monetary/TrendsSeptember09.pdf

www.ukba.co.uk

Small business lending increases in May

The latest figures from the British Bankers' Association (BBA) show that lending to small businesses rose in May. According to the BBA's statistics, lending to small firms increased by £153 million in May, compared to April, while over 45,000 new small business banking relationships were established.

For more on this story go to:
http://www.bba.org.uk/content/1/c6/01/62/98/Small_Business_Monthly_Press_Release%20May%2009.pdf


www.ukba.co.uk

Business lending remains weak

Lending to businesses remained weak in April, according to the Bank of England's Trends in Lending report. In particular, lending to firms in the wholesale and retail trades and the manufacturing sector fell sharply over the past year. The report also highlighted that approval rates for lending to small and medium-sized businesses are falling but added that some lenders are expecting availability of credit to improve over the next three months.

For more on this story go to:
http://www.bankofengland.co.uk/publications/other/monetary/TrendsApril09.pdf


www.ukba.co.uk

High street banks’ lending to small businesses increased by £211 million

There was little change in deposits, while over 44,000 new small businesses banking relationships were established.

Commenting on the data, BBA statistics director, David Dooks, said:
“Lending to the 3.8 million small businesses supported by the main high street banks rose again in February and significant numbers of new small business relationships continue to be established, despite the current recession and regular reports of difficult business conditions. Deposit balances are little changed, reflecting the slow trading environment many businesses are facing.”

Source: www.bba.org.uk

www.ukba.co.uk

Only One In 20 SMEs Confident Of Bank Lending

The number of business owners confident of being able to secure bank funding has plummeted from 73 to six per cent over the past year, according to a poll.

One in ten owners of small and medium-sized enterprises (SMEs) is turning to family and friends for cash, six times as many as 12 months ago, according to the survey of 505 business owners from asset-based lender Close Invoice Finance.

That implies that 540,000 businesses across the UK are borrowing from family and friends to keep afloat.

‘The relationship between banks and SMEs has collapsed, with severe repercussions for the sector as a whole,’ says David Thompson, CEO of Close Invoice Finance.

‘With banks now closing their doors to SMEs, owners are relying on friends and family for financial support, placing immense pressure on these most precious relationships,’ adds Thompson.

Last month the government set aside £10 billion to guarantee £20 billion of bank loans to businesses with sales of up to £500 million.

Source: http://www.growthbusiness.co.uk/news/business-news/996147/only-one-in-20-smes-confident-of-bank-lending.thtml