If you would like to receive more of news and insights from our team sign up here.
Demand for lending for small business is on the up - signalling an increasing confidence in the marketplace
Britain’s smaller businesses have been credited with keeping the country going during the recession, and it now seems as though they are leading the charge into a new era of prosperity. The Bank of England’s quarterly credit conditions survey revealed that in the second quarter of this year although demand for lending from medium sized businesses remained static, the demand for lending to small businesses increased significantly, whilst demand from larger businesses also increased.
Interestingly, whilst the overall availability of credit to corporates remained virtually unchanged, the availability of credit to small businesses increased; resulting in the highest net percentage balance seen since Q3 2010. Commenting on the results, BBA chief economist, Richard Woolhouse, said “It’s heartening to see that demand for lending from small businesses has increased significantly as this is a clear, positive sign that firms have the confidence to take on borrowing to invest and expand.” This resurgence in confidence is not confined to the UK alone. The bank of Ireland has recently announced that in the first half of this year lending to SMEs increased by 18% over the same period last year.
Admittedly part of the rise in demand for credit may be down to the fact that over the past two years business start-ups have been at record numbers, but the fact remains that increased demand demonstrates an increased level of confidence and this can only be good for business as a whole.