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Lending to SMEs increases

Published On 9 May 2007 at 08:55:56

Banks are increasingly providing better support services for small and medium-sized enterprises (SMEs), a new study suggests.

According to the British Bankers' Association (BBA), 590,000 SMEs established new banking relationships over 2006.

Over the period, lending to small businesses was worth £37.2 billion - eight per cent more than in 2005.

Deposits by SMEs increased by 11 per cent and totalled £46.4 billion, while overdraft borrowing fell two per cent to £8.8 billion.

"Banking services are important for small firms and for the UK economy," explained BBA director of statistics David Dooks.

"In 2006, the liquidity of the three million firms in the small business sector was particularly strong, as their deposits grew and their use of overdraft borrowing reduced marginally.

"At the same time, small firms' structured term borrowing to fund investment showed healthy growth."

A recent study by the Federation of Small Businesses found that 70 per cent of SMEs were happy with their banking services.

 

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