SME credit confidence needed
Mon, 06 Jul 2009
The Bank of England's latest credit conditions survey may suggest a lack of financial confidence among small and medium-sized enterprises (SMEs), it has been claimed.
New figures show that demand for both secured and unsecured lending from small businesses declined over the three months to June 2009.
Demand for secured lending from small businesses declined with a net percentage balance of 6.7 in March and -16.0 in June, while unsecured demand came down from 2.6 to -26.7 over the same period.
Commenting on the figures, George Derbyshire, chief executive of the National Federation of Enterprise Agencies (NFEA), said small businesses may be lacking confidence in approaching banks because of what they have heard in the press.
He added: "These figures demonstrate that perhaps confidence in the financial system is not as high as we'd like it to be.
"Perhaps if businesses did approach banks they would get a better reception than they anticipated as banks are keen to support small businesses.
Mr Derbyshire suggested that a rise in credit card lending - from a net percentage balance of 17.3 in March to 21.7 in June - may confirm a lack of assurance about obtaining loans among SMEs.
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