Small business lending up in third quarter

Lending to small businesses grew by just under £1bn in the third quarter of 2008, according to the British Bankers’ Association (BBA).

This growth was marginally lower than in the second quarter and in the corresponding quarter of 2007.

Over the twelve months to September:

Loans grew 10% to £44.8bn, while overdraft borrowing stood at £9.3bn, some 4% higher than a year earlier.

Total deposits totalled £55.0bn, 3% up on the year.

New banking relationships have been established for 538,300 small businesses.

BBA statistics director, David Dooks, said: "The effects of the deteriorating economy are becoming more apparent. Slowing growth in deposits shows that small businesses are increasingly funding their activities out of cashflow, but a rise in lending in the third quarter, consistent with growth in the previous quarter and the corresponding quarter of 2007, shows banks continuing to make finance available."