While mortgage lending is showing signs of momentum leading to predictions that the housing market is set for further growth, meaningful growth in business lending continues to be elusive which will force many business to look for alternative sources of funding.
While the government is telling us that the economy is in good shape and GDP figures seem to back this up, the banks continue to lack confidence when it comes to lending to businesses. Yet it is this very reluctance to lend to businesses and enthusiastic approach to mortgage lending which should be concerning.
With SME businesses being the driving force of the economy, the emphasis should be on helping them with expansion plans or with survival when cash flow is tight.
According to Bank of England figures, the value of mortgage lending increased by its largest amount since 2008 while lending to non-businesses saw a £5.487 billion monthly fall which marked the biggest drop since records began in 2011.
Policy makers are aware of how important business lending is to the economy and they will find these latest figures alarming given the measures taken to try to increase lending to small and medium sized businesses.
Fortunately there may be alternatives to bank lending such as asset-based finance. Call us now to find out more.