Small businesses are being backed with finance, BBA claims

Wednesday 31 July 2013

City of London

The banking industry is striving to deliver funding to small and medium-sized businesses (SMBs) which need it the most, it has been claimed.

According to the British Bankers' Association (BBA), which has published borrowing and saving figures for the UK's 120 postcode areas, the areas that need finance the most are getting more funding. 

The latest report reveals that the majority of regions are net depositors, with SMBs in  London, the south-east, the east of England, East Midlands, Yorkshire & Humberside, the north-east, the north-west and Scotland having more on deposit than they are borrowing.

It shows that, in all regions outside London, the south-east and the east of England, bank finance to SMBs is greater as a proportion of total lending than their regional share of SMB turnover.

For example, the BBA noted that the south-west accounts for five per cent of SMB activity in the UK but receives 11 per cent of lending, while Wales accounts for two per cent and receives five per cent.

The BBA said the publication of regional data will provide greater transparency, helping the government and businesses to understand the borrowing landscape for SMBs across the UK.

This should contribute to better evidence-based policy making, which can help SMBs as they embark on their growth plans, the BBA suggested.

Anthony Browne, chief executive of the BBA, said the figures show that - from Aberdeen right down to Truro - the UK’s banks are putting over £100 billion into the engine room of the economy, the SMB sector. 

"Bank finance is supporting jobs and growth up and down the country," he claimed.

"Key growth regions, such as the north-east and the north-west, are receiving more bank finance than their relative size."

Mr Browne claimed that, given the wider economic outlook, many SMBs are building up large cash reserves and paying down debts rather than taking on more borrowing.

He said this is why the majority of regions are net depositors, saving more money than they are borrowing.

"The UK’s banks are working hard to restore business confidence through initiatives such as building a UK-wide network of business mentors, offering an independently-monitored appeals process for businesses whose borrowing applications have been declined, and working with alternative finance providers to provide access to different products," Mr Browne added.

Microsoft solutions can help your business drive revenue and be more competitive.

Posted by Steve Williams