The BBA is the voice of the banking industry for all banks who operate within the uk
Banks' support for small businesses
12/05/2009
Further evidence that bank finance is still available for small businesses has come from a report by the Institute of Directors.
The report shows that 93% of businesses in Northern Ireland had been able to renew their existing bank loan; 80% were able to renew an existing overdraft and 63% of respondents were able to extend an existing bank loan.
Figures recently published by the British Bankers' Association show that the main UK high street banks have increased their lending to businesses, both to their existing customers and to customers of other lenders (for example, non-banks and overseas banks) who have reduced their lending to this sector.
In the current economic climate, banks will naturally be looking closely at a business's management accounts, cash flow forecasts and risk exposure before agreeing to lend. A bank would also look at its customers' customers too - for instance, whether the business was reliant on only a few large customers (in which case, if one of those customers was lost, the business would be likely to suffer a large fall in income, making it more difficult - and some times impossible - to repay any borrowing). It would also want to know whether the business had a "plan B" in case its projections failed to materialise.
Click here for the latest BBA small business lending figures.
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