Credit conditions improve for SMEs
10 June 2015
Net lending by Funding for Lending (FLS) Extension participants to SMEs was £0.6 billion in the first quarter of 2015, according to new data from the institution. This compares with quarterly net lending to SMEs in Q4 2014 by FLS participants of -£0.8 billion, while the quarterly average for 2014 was -£0.5 billion.
During the first quarter of 2015 the number of groups participating in the FLS Extension was 34. Of these, ten participants made drawdowns of £3.1 billion in total. Participants also repaid £1.5 billion, taking outstanding drawings to £57.3 billion.
The Bank said a number of institutions expanding their lending in 2015 Q1 and further borrowing allowances of £4.9 billion have been generated, spread across 16 participants. Aggregate net lending to SMEs – including lending by banks and building societies not participating in the FLS – was also positive in Q1 2015.
The improvement in corporate credit conditions in part reflects the significant fall in bank funding costs that has occurred since the launch of the FLS, the Bank of England said.
This is good news for business owners and as always, if you need any advice you can contact us by email.