Q3 2016 Sees Slight Net Increase In Borrowing By SMEs

According to data produced by the British Bankers Association (BBA), overall net lending to SMEs in the third quarter of 2016 grew by £0.5 billion. Although this was only a modest increase it was still pleasing to see.

A small overall net increase in lending to SMEs by high street banks was seen in Q3 of 2016
Lending by high street banks in the UK to SMEs showed a small net overall increase in the third quarter of 2016.

The total amount of borrowing to SMEs amounted to £108.5 billion as at the 30 September 2016. This was made up of £9.6 billion for overdrafts with £5.1 billion being to businesses of a medium size and £4.5 billion to small businesses, £86.3 billion in respect of structured term loans and £12.5 billion in respect of borrowing facilities that businesses had yet to utilise.

It is interesting that the number of applications for loans to SMEs in the third quarter of 2015 totalled 35,767 yet in the third quarter of 2016 the number of such applications had dropped to 31,596. This equated to a fall of 13% that is a significant figure. Applications for overdraft facilities in the third quarter of 2015 amounted to 43,416 but in the third quarter of 2016 the figure was 43,047.

The percentage of loan applications that were approved for smaller businesses in the third quarter of last year was 80% and the percentage of overdraft applications such businesses had approved was 77%. For medium sized business, the percentage of approved loan applications in the same quarter was 89% and the percentage of overdraft applications for such businesses was 97%. The amount of new overdrafts and loans approved in the third quarter of 2016 to SMEs was 12% less than in the third quarter of 2015.

Of course, it is worth noting that it is not just the high street banks that provide borrowing to businesses here in the UK. There are a number of other specialist lenders including the likes of peer-to-peer lending platforms. So, if you are looking for the likes of a commercial mortgage, business loan or bridging loan why not get in touch with us here at Commercial Mortgage Link and we will put you in touch with an experienced, specialist mortgage broker who will endeavor to find you a competitive finance package to meet your specific requirements.

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