Bank lending falls amongst small business owners

The Bank of England’s Credit Conditions Survey revealed that demand for bank-based lending from burgeoning companies had fallen during Q4 of 2014.

The survey was conducted between the 10th November and the 1st of December, involving both lenders and business owners. It revealed that small firms were now borrowing less from traditional banks.

However, over the same period demand for credit from medium-sized enterprises increased significantly. Large corporations also saw more need for money from banks, but only slightly.

Iain Moffatt, head of KPMG Enterprise, commented:

“Unsurprisingly, appetite for bank lending amongst small companies continues to wane. Is this due to discouraged demand? Small businesses are now fully aware of the myriad of difficulties in obtaining bank loans so many now simply choose not to apply.”

The credit condition survey also looked at the availability of bank lending for each quarter. For Q4 of 2014, the availability of bank finance had increased for large corporations. Interestingly, the availability of credit for small enterprises has remained the same, but for medium-sized firms credit availability has tightened considerably. The survey also revealed that lenders expect credit demand and credit availability to fall away during Q1 of 2015.

At DJB, we can arrange financing for any size or type of business easily and in a straightforward manner. We provide asset finance solutions, as well as operating lease arrangements, which is a great way to ensure that your business has the equipment it needs to compete without causing cash flow issues. Please contact us to find out more.

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