Banks approved £5.6bn of new loan and overdraft facilities during Q3, 12% less than in the same quarter last year.
This drop was accompanied by a 13% decline in the number of loan applications, with figures tumbling from 35,767 in Q3 2015 to 31,596 in Q3 this year.
Mike Conroy, managing director for business finance at the BBA, said: “Application approval rates remain very healthy and over 80% of businesses are getting finance when they apply.
“But there is clearly lower demand for finance from businesses overall than in the same quarter a year ago.
- SME fund to launch IPO
- Brits could solve £4bn business funding gap
- SME investment platform secures £150m funding
“This subdued demand reflects reduced or postponed investment plans and continued deposit holding, particularly by smaller firms, as they operate within an uncertain trading environment.”
Despite this national decline, Mike explained that demand for credit varied by region.
Scotland, Wales and the North West all experienced an increase in the value of approved loans during the third quarter.
The news comes a week after specialist lender Amicus Commercial Finance reported 76% of SMEs had been forced to write off unpaid debts.
Leave a comment