UK FINANCE: BUSINESS FINANCE REVIEW Q4 2020

UK Finance's latest Business Finance Review showed that gross lending to small and medium-sized businesses across the UK totalled £63.6 billion last year, some 162 per cent higher than 2019. This underscores a significant rise in demand for finance as businesses responded to the pandemic.

Government-backed lending schemes, alongside other loan and overdraft facilities, have helped SMEs to navigate the uncertainty of the pandemic and develop new products and business models. While some businesses have needed to use this money, some SMEs have put it aside for the future. At the end of 2020, nationwide deposits were 28 per cent higher than at the end of 2019, which suggests firms are leaving cash in reserve to support activity as the economy reopens.

Stephen Pegge, Managing Director of Commercial Finance, comments:

?The enormous disruption faced by SMEs in the past year has been matched with a significant increase in the supply of finance, particularly through government-backed schemes. This lending has provided an important lifeline for businesses to manage cashflow and sustain activity through the successive lockdowns.

?Some SMEs have entered 2021 with financial headroom in the form of increased deposits and flexibility in existing overdraft, invoice and asset-based lending facilities. However, for many businesses, and some specific sectors, there may be extended disruption and financial difficulty ahead. The banking and finance industry will continue to support businesses across the country through these times to help them trade and invest for recovery.?

THE "COST OF CRIME" RISES TO ALMOST £100 BILLION A YEAR

The "cost of crime" to individuals and businesses has risen to almost £100 billion a year according to research by the Labour Party (The Times, £). Costs incurred from crimes against businesses have more than doubled since 2015-16, jumping from £8.7 billion to £22.8 billion in the year to September 2020. The calculation of the cost of crime is based on how much individuals and businesses spend on the "anticipation of crime" such as insurance, the "consequence of crime" such as stolen property, and the "response to crime" including police response and court time.

Separately, millions of British people are using their pet's name as their online password, according to the National Cyber Security Centre (NCSC), which could make them an easy target for hacking (BBC News). This also applies for passwords based on other easily accessed information from social media such as birthdays or family names. The NCSC said 15 per cent of the population used pets' names, 14 per cent use a family member's name, and 13 per cent pick a notable date.

UK Finance urges customers to follow the advice of the Take Five to Stop Fraud campaign, including keeping your personal information secure and providing as little personal information on social media as possible.

NEWS IN BRIEF

Prince William told a joint event with the International Monetary Fund and World Bank that banks can help turn the tide in the battle against climate change by investing more in nature (The Guardian).

The City of London Corporation will launch a new Covid-19 recovery grant on Monday, which will see SMEs from hospitality, retail, medical and leisure sectors able to apply for grants of up to £100,000 per business (City AM).

UK businesses have been consulted by the government about the possibility of implementing up to six months of social distancing each year and the long-term use of masks and plastic screens. The review is being carried out to help plan the return to offices once the economy reopens fully on 21 June (Financial Times, £).

Think-tank CityUnited Project has said a digital pound must be at the heart of Britain's efforts to strengthen the City of London's global attraction as a financial centre after Brexit (Reuters).