Loans and credit cards becoming popular among SMEs
Aug 23 2007
An increasing number of small businesses are being funded by loans and business credit cards, a high street bank has claimed.
Lloyds TSB says that the firms are seeking financial assistance in the commercial sector rather than taking up government initiatives.
And the bank claims that SMEs are making use of the increased choice and speed of commercial sector lending.
Commenting on the uptake of loans and business credit cards, Stephen Pegge at Lloyds TSB says: 'In the past, a lot of the time people would just come in and get an overdraft to start a business.
'More and more people are funding their business through structured loans and fixed rate loans as well as some variable rate ones.'
Explaining that small businesses occasionally require a quick cash injection, he adds: 'Small firms often need an answer and need their money quite quickly, because often they have short time scales and may have an urgent requirement for finance.'
Meanwhile, the government's Small Firms Loan Guarantee is being used less by SMEs. Figures show that the number of loans fell by almost half, from 5,000 in 2005 to 2,700 in 2006 and the total amount borrowed also fell from £422 million to £210 million.