Banks still lending to small businesses despite credit crunch

British Bankers’ Association (BBA) figures for the main high street banks providing small business services show that over the twelve months to June:

Term lending grew by 11%, to £44.0bn and borrowing on overdrafts stood at £9.2bn, some 3% higher than a year earlier.

Total deposits stood at £54.5bn, having grown 6% over the year.

New banking relationships have been established for 543,000 small businesses and 41% of small businesses bank online.

BBA statistics director, David Dooks, said: "Banks are still providing finance to support small businesses in the slowing economy, despite the impact of the credit crunch on lenders. These figures reflect the economic climate for the small business sector, with borrowing continuing to expand, but deposit growth slowing. In the face of weaker trading conditions, businesses are using all the cash they generate, while those seeking finance are generally taking fixed rate structured loans or using previously agreed facilities."