Loans to small firms rise by almost £1bn

Natalie Holt
21-Nov-2008
Lending to small businesses grew by just under £1bn for Q3, statistics from the British Bankers’ Association reveal.
Year-on-year loans to small businesses rose by 10% to £44.8bn in September with overdraft borrowing 4% higher than last year at £9.3bn.

The level of deposits shows an increase of 3% at a total of £55bn.

But there are signs that the growth of lending to small businesses is beginning to slow. The BBA’s figures for Q2 covering the twelve months to June show that term lending grew by marginally more by 11% to £44bn.

Deposits for Q2 showed an increase of 6% from the same time last year at £54.5bn.

David Dooks, statistics director at BBA, says: “The effects of the deteriorating economy are becoming more apparent. Slowing growth in deposits shows that small businesses are increasingly funding their activities out of cash flow.

“But a rise in lending in Q3 consistent with growth in the previous quarter and Q3 2007 shows banks are continuing to make finance available.”