Banks 'still lending to SMBs'
Feb 17 2009
Lending to small and medium-sized businesses (SMBs) increased over 2008, research claims.
Figures from the British Bankers Association (BBA) show loan levels increased by nine per cent over the year, with the average monthly value of loans taken out being £297 million higher than 2007.
The findings also reveal there was little change in overdraft lending, with a rise of £2 million, while the net change in deposits was minus £12 million.
David Dooks, BBA statistics director, explains: 'In the face of the economic downturn and slowing activity in their trading markets, small businesses increasingly funded operations out of their cashflows, leaving overall deposit levels at the year-end very similar to those a year earlier.'
Furthermore, the organisation claims that 537,600 SMBs established new bank relationships in 2008, an increase of 44,747, with Dooks saying this increase means the UK's banks are now providing support to 3.8 million small firms.
Last month, BBA chief executive Angela Knight welcomed moves by the government to free up lending to small enterprises.
She also highlighted the importance of working capital and solid business plans in surviving the economic downturn.
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