Report shows fall in business lending

The Trends in Lending report shows that net monthly lending to UK businesses has plummeted from £7 billion in 2007, to just £1.5 billion by March this year.

Lending looked especially grim for small businesses – as those with a turnover of less than £1 million saw a drop in both approval rates and in the number of loan applications.

However, the FSB notes that this data should be interpreted with care. A spokesman from the group told More Than Business that the speed of recent events meant the official figures may not reflect the current situation.

She said that owners were becoming more familiar with the Government’s Enterprise Finance Guarantee – launched in January – and that lending has recently picked up speed.

“We’ve certainly had some members saying that they just don’t want to go to the bank because they know it is going to be such a hassle getting a loan,” she said.

“They have heard from others in their community that they have gone through months of meetings to get a loan just to be refused.

“But now we are starting to see money from the Enterprise Finance Guarantee trickle through.

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