Half of Britain saw bank lending to SMEs fall
28/03/2019
Over half of the country has seen bank lending to SMEs fall over the last year, as small businesses continue to face difficulties securing finance, says London-based specialist debt adviser Hadrian’s Wall Capital (“HWC”).
74 out of 132 postal areas of Great Britain (England, Wales and Scotland) saw falls in the value of outstanding bank loans to SMEs over the last year, which follows on from the fall in SME bank lending in 2017.
Many of the cities in Britain’s former industrial and manufacturing heartlands experienced some of the largest falls in bank lending, which has made the local business environments even more challenging given the uncertainties created by Brexit.
Birmingham suffered the biggest fall in the country, with lending to SMEs falling 8pct in the last year, followed by Oldham (7pct) and Sheffield (6pct). HWC says that these former industrial areas are often the most in need of SME finance to help restore efforts to revitalise their local economies.
Only three areas of the 132 areas studied - Newport, Warrington and Oxford - saw increases in lending of 5pct or more in the last year.
Despite a previous study by HWC which demonstrates that SME loans are less risky than high-yield corporate bonds, SMEs are often regarded as being of a higher risk of default compared to larger businesses and banks have been keen to de-risk their balance sheets ahead of a potential no-deal Brexit.
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