Fall In Demand For Small Business Lending Reported

Fri, 01 Apr 2011

Demand for loans and other types of finance from Britain’s small businesses "fell sharply" in the first quarter of 2011, according to Bank of England’s latest Credit Conditions Survey.

Although demand for lending dropped, the availability of credit to both small and medium-sized businesses (SMEs) remained unchanged over the three-month period, the survey revealed.

Lenders said the decline in demand was due to seasonal and weather-related factors as well as "heightened uncertainty" ahead of the Government’s spending cuts.

They also reported that they expected credit availability for small firms to increase slightly in the second quarter of the year.

Other findings from the BoE report included an expected rise in lenders’ margins on lending to small enterprises, with margins forecast to continue increasing over the next three months, and a small increase in fees and commissions on small business lending .

The number of SMEs defaulting on business loans also grew over the first quarter, with some lenders blaming the rise on poorer assessment of customers’ creditworthiness.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page



 

Business Newsletter

Please enter your email below and subscribe to our monthly newsletter

Reduce mortgage paymentsSave on Your Mortgage

Would you like to save money on your mortgage? Fill out our quick mortgage enquiry form.

Health InsuranceProtect Your Health

Find Critical illness, Life and Private Medical Insurance PMI policies.