Figures confirm SMEs are suffering |
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| Finance | |
| Written by Gary Howes | |
| Monday, 16 February 2009 | |
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The British Bankers Association has released figures confirming high street banks progressively cut lending to SMEs throughout 2008. The BBA has released figures showing that the number of new banking relationships made between SMEs and UK banks decreased throughout 2008 as the financial crisis deepened.Outstanding loans increased a full 9% year on year in December as small businesses struggled to come to terms with the economic reality. "In the face of the economic downturn and slowing activity in their trading markets, small businesses increasingly funded operations out of their cash flows, leaving overall deposit levels at the year-end very similar to those a year earlier," BBA statistics director, David Dooks said. Economic commentators believe that it is getting funding to small businesses flowing again that is imperative to reviving the UK economy. Ian McCafferty, CBI Chief Economic Adviser says that it is important business is able to obtain the credit it needs to ride through these difficult times, without increasing the money supply. While the figures on new banking relationships suggests the funding for UK small businesses is drying up McCafferty did point out that, "structured term lending to small businesses grew by 9% last year, while overdraft borrowing changed little in the year." Below are the BBA figures in detail:
 Individual banks contributing to this survey are Abbey (inc Alliance & Leicester), Barclays, Clydesdale (inc Yorkshire Bank), HSBC, Lloyds Banking Group (inc HBOS), Royal Bank of Scotland (inc NatWest) and The Co‑operative Bank. Comments (0)
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