Banks Willing To Help Small Firms Recover

Fri, 30 Apr 2010

The British Bankers' Association (BBA) has revealed that UK banks are ready to help small businesses "benefit from the economic recovery" if they start investing again.

According to the organisation, access to bank finance has improved with four out of every five business loan applications currently being approved.

The BBA said the figure goes against the perception that banks are facing a " credit squeeze" following the recession, which has put off many UK enterprises from applying for loans and overdrafts for investment purposes.

As a result, growth in bank lending to small businesses has been held at just one per cent in the past year.

Speaking at an Institute of Chartered Accountants in England and Wales (ICAEW) event, chairman of the BBA's small business panel Stephen Pegge said: "Bank lending to small businesses is one of the most important services banks undertake but it's ultimately driven by demand for finance and the quality of applications."

"Naturally when sales fall, the demand falls for finance to fund working capital and fixed asset investment - and affordability is stretched."

The finance expert added that small businesses looking for loan and overdraft facilities in the current market can also benefit from "paying on average less than half the total interest costs of two years ago" due to low rates .
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