Bank lending to business jumps to £12 billon

- Advertisement -


Research from debt advisory firm Altenburg shows UK credit conditions are getting back to normal

- Advertisement -

B

- Advertisement -

ank lending to UK companies has recovered sharply from a slump which followed the end of a government pledge to guarantee loans made as part of the emergency support schemes during Covid.

The total amount lent to non-financial firms rose by £12 billion to £553 billion in the nine months to the end of May according to research from Altenburg, the business-to-business debt advice consultancy. That followed a decline of £7 billion immediately after the end of the Coronavirus loan schemes. They were designed to keep banks lending during the peak of the pandemic and meant that the taxpayer would step in if a borrower defaulted.

- Advertisement -

Altenburg said the rise showed credit conditions were getting back to normal after an initial period of caution without the backstop, with lending activity consistently on the rise since September 2021.

“Businesses will be glad to see banks have started increasing lending,” said Will Senbanjo, a partner at Altenburg.

“Government-backed schemes were vital for keeping the flow of lending going during the pandemic but once they ended, bank funding was harder to obtain for several months.”

Altenburg pointed out that loans remained “affordable” for “most UK businesses” even with the Bank of England in the process of lifting interest rates, taking the base rate to 1.25% from 0.1% six months ago.

“There are plenty of businesses looking at merger and acquisition deals as they seek to grow their business’ overall value and attractiveness to future buyers. For businesses seeking to borrow to achieve this aim, now could be a good time to lock in a low rate on their lending,” said Senbanjo.

,

Credit: www.standard.co.uk /

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox