BoE: SME lending average up in September

Gross lending to businesses was £17.3 billion in September, compared to the average of £15.5 billion over the previous six months. Within this, gross lending to SMEs was £4.8 billion, compared with the average of £4.3 billion over the previous six months. Repayments by non-financial businesses were £18.5 billion in September, compared to the average of £16.3 billion over the previous six months. Within this, repayments by SMEs were £5.0 billion, compared to the average of £4.5 billion over the previous six months.

The number of loan approvals for house purchase was 61,267 in September, compared to the average of 64,720 over the previous six months. The number of approvals for remortgaging was 30,500, compared to the average of 31,632 over the previous six months. The number of approvals for other purposes was 9,241, compared to the average of 10,468 over the previous six months.

Lending secured on dwellings increased by £1.8 billion in September, compared to the average monthly increase of £2.2 billion over the previous six months.

The Bank of England's Credit Conditions Survey, published earlier in the month, confirmed that lenders' willingness to lend fell in Q3.

The survey said:

"Many lenders noted that operational issues associated with the implementation of the Mortgage Market Review had pushed down on credit availability over the summer."

However, lenders expected that approval rates would increase in Q4, driven by 'market share objectives'.

Samir Desai, CEO and co-founder of Funding Circle, commented:

“Finally we have some more positive news regarding small business lending, but we must be cautious about relying on traditional forms of finance too heavily. Large banks will continue to struggle to meet demand due to various legacy issues restricting their capacity to lend. The market needs more competition and diversity and online marketplaces are well placed to help with their nimble technology."