Banks 'lending to most small firms'

The majority of small businesses who have applied for loans or overdrafts in the past 12 months were successful, according to new research published today.

Some 72% of small and medium sized enterprises (SMEs) who applied for an overdraft got a positive response while 59% of loan applicants received their request, according to a study commissioned by the chief executives at Britain's six biggest banks.



But only one in six - or 15% - of businesses surveyed have applied for a new facility or renewed an existing one in the past 12 months.



The figures, based on more than 5,000 telephone interviews, address concerns over the level of bank lending to small businesses after official figures suggested that banks were falling short of agreements drawn up with the Government under Project Merlin.



The research was conducted by market research firm BDRC Continental, which was selected by the cross-bank Business Finance Taskforce, to report on a quarterly basis.











Business lobbying organisation the CBI said it was concerned the figures showed SMEs lacked confidence when considering borrowing from banks.



Katja Hall, CBI chief policy director, said: "It's concerning that far fewer SMEs are confident about receiving the funding they apply for over the next quarter than those who actually got what they asked for last year.



"This shows that banks need to work hard to build stronger relationships with their smaller business customers."



Barclays, Royal Bank of Scotland, Lloyds Banking Group, HSBC and Santander UK lent £16.8 billion to SMEs in the first three months of the year, earlier figures from the Bank of England said.



Under the Project Merlin agreement the banks said they would increase lending available to SMEs to £76 billion this year, which equates to £19 billion in the first quarter.



The figures showed the banks were on course to meet overall business lending targets of £190 billion this year, equal to £47.5 billion for the quarter, as they lent £47.3 billion in the period.



The British Bankers' Association (BBA) said today's SME Finance Monitor was encouraging and showed businesses were able to get the credit they need.



A statement from the BBA said: "The picture is also complex with many customers clearly still concerned about the economic climate and so are less inclined to borrow."



Elsewhere, the research revealed certain types of SMEs were less likely to be offered what they wanted, such as those with smaller numbers of employees as well as younger companies.



SMEs which did not approach a bank cited four main reasons - current economic climate, discouragement after making an informal inquiry at the bank, cost and time involved with borrowing and the principle of borrowing.



Looking ahead, one in five SMEs is expected to apply for new finance in the next three months.



Steve Radley, director of policy at manufacturing organisation EEF, which is a member of the Business Finance Taskforce, said: "While this survey simply provides us with a snapshot of experiences and intentions, it does shed some new light on levels of discouraged demand.



"A significant proportion of small companies is put off from approaching a bank for external finance and we need to see this start to fall in the coming quarters."

News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Life and Style
tech
PROMOTED VIDEO
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
John Terry, Frank Lampard
footballChelsea captain sends signed shirt to fan whose mum had died
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Sport
David Moyes and Louis van Gaal
football
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits