Key data highlights:

  • The quarterly value of new loans to SMEs in Great Britain was almost identical in the second, third and fourth quarters last year. The £5.6bn of new loans drawn by SMEs in Q4 was, however, some 11 per cent lower than in the final quarter of 2016.
  • Reduced volumes of loan approvals reflect lower SME borrowing appetite in general, although SMEs in Wales buck the trend, with more loans approved than in the same quarter last year.
  • Within industries, SMEs in production and manufacturing borrowed more in the final quarter of last year than in Q4 2016, whereas service sector SMEs saw comparatively lower volumes and value.
  • Banks approved eight in 10 small business loan and overdraft applications and nine in 10 loan and overdraft applications from medium sized business

Commenting on the data, Stephen Pegge, Managing Director, Commercial at UK Finance said:

“SME borrowing in the final quarter of 2017 remained subdued compared with 2016, despite higher approval rates for bank finance. Uncertainty about domestic trading prospects and a high level of reserves reflected in growing deposits are weakening demand. However, lending to the more export oriented SMEs in production and manufacturing industries expanded in 2017, even as the more domestically oriented service industries retrenched.”

Notes to Editor

  1. For more information please call the UK Finance press office on 020 7416 6750 or mail press@ukfinance.org.uk.
  2. UK Finance is a new trade association which was formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation brings together most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.
  3. This update relates to the business of mainstream SME financing banks in Great Britain and Northern Ireland, representing around 60 per cent of all debt finance for SMEs in the UK.
Attachments
Q4 2017: SME manufacturers borrow more while service businesses retrench
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