SME lending set to bounce back » SMEInsider

SME lending set to bounce back

Lending to the UK SMEs is beginning to bounce back after a lean time in 2015. According to the latest SME Growth Watch Report 2016 from the Hampshire Trust Bank, while lending to small and medium sized businesses (SMEs) across the top 10 UK cities dropped by over £2bn1 in one year, there are signs that 2016 will see an uptick in lending.

Among the highlights from the research are:

  • Lending to SMEs dropped by £2bn in one year and £4bn since 2013
  • Edinburgh and Manchester experienced largest decline in lending last year
  • When looking to the future, SMEs feel confident about securing finance
  • Early indicators demonstrate an uptick in lending to SMEs in 2016

The research, conducted in partnership with the Centre for Economics and Business Research (CEBR), analyses the latest full year British Bankers Association (BBA) lending figures to reveal a decline in SME lending. Across the UK’s 10 major cities, outstanding lending dropped by 6% (£2bn) between Q4 2014 and Q4 2015. There has been a 12% (£4bn2) decline in lending levels since Q2 2013, when city data started to be collected

According to the CEBR, the previous decline in SME lending is down to two main factors: two-fold. tougher lending criteria set by banks have meant that those SMEs that wish to borrow have found themselves unable to do so; and some firms have reduced their investment intentions and their need for borrowing, partially as a consequence of an unstable economic environment.