Member Article

Lending to SMEs falls by £3bn

The stock of lending to small and medium sized enterprises fell by £3bn in the three months to May, according to The Bank of England’s Trends in Lending report.

Overall, the annual rate of growth in the stock of lending to UK businesses was negative in the three months to May.

Credit availability was broadly unchanged for businesses, according to respondents of the Bank’s 2012 Q2 Credit Conditions Survey.

Some smaller firms reported difficulties in obtaining secure loans, as finance was seen to be more available for firms with strong balance sheets.

John Cridland, CBI Director-General, said: “With lending levels falling and prices rising, we need immediate action to boost lending in the economy to help growth.

“The Government has this week announced good initiatives to boost exports, and the Funding for Lending scheme should help lower costs, but action on liquidity buffers would have most impact now.

“The Treasury and Bank of England have signalled a willingness to relax liquidity rules, but the FSA needs to drive forward with these changes immediately so that banks can release funding into the economy.”

This was posted in Bdaily's Members' News section by Tom Keighley .