Business Lending In August Positive For First Time in Six Months

Fri, 22 Oct 2010

The amount of money lent to British firms by banks in August rose for the first time since February, according to new data from the Bank of England .

The Bank’s latest ‘Trends in Lending’ report showed that Britain’s banks and building societies advanced £300 million to businesses in August, following six months of falls in business lending including a £2.5 billion pound drop in July.

"Contacts of the Bank's network of agents reported that availability and terms of credit were improving for larger companies, though credit availability for small businesses generally remained difficult," the report said.

However, it also revealed that figures for September suggested that the improvement had not been sustained.

"In recent discussions, some major lenders reported that businesses were continuing to pay down debt as they reduced leverage and improved working capital management," the Bank added.

"Data from the major UK lenders indicated that net lending to businesses weakened in September."

Commenting on the report, Lord Oakeshott, treasury spokesman for the Liberal Democrats, said: "Small business lending is going from bad to worse. The annual rate of contraction is approaching 5 per cent. The smaller your business, the harder you're hit."
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