Banks still lending to small businesses
According to the British Bankers Association (BBA), banks are still lending to small businesses despite the credit crunch. Overdrafts have been replaced with three year term lending with variable rates. BBA figures for the main high street banks providing small business services show the following trends over the twelve months to June:
- Term (usually more than three years) lending grew by 11 percent, to £44.0bn and borrowing on overdrafts stood at £9.2bn, some three percent higher than a year earlier.
- Total deposits stood at £54.5bn, having grown six percent over the year.
- New banking relationships have been established for 543,000 small businesses and 41 percent of small businesses bank online.
BBA statistics director, David Dooks, said, “Banks are still providing finance to support small businesses in the slowing economy, despite the impact of the credit crunch on lenders. These figures reflect the economic climate for the small business sector, with borrowing continuing to expand, but deposit growth slowing. In the face of weaker trading conditions, businesses are using all the cash they generate, while those seeking finance are generally taking fixed rate structured loans or using previously agreed facilities.”
Small businesses are defined here as those commercial businesses with an annual bank account turnover of £1 million or less.
For more information, and data, click here (information from the BBA web site).
BBA, whose members include Bank of Scotland, Barclays, Clydesdale, HSBC, LLoydsTSB, Royal Bank of Scotland and The Co operative Bank, also provides information on bank support for small businesses and practical help and advice for small businesses.
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© Chilli Publishing Ltd 2008 |
12 SEP 2008 |
