January 09 small business figures for the high street banks

Banks are working to help all business customers through industry-wide initiatives like the Statement of Principles, which, since its publication in January, has been selling at around 300,000 copies a week. In addition, the BBA's Business Account finder - which aims to match firms to the right deal for them - has seen a 28 per cent increase in businesses accessing the site since the beginning of the year. Banks are setting up advice lines, running business seminars and workshops up and down the country and working with the Department for Business, Enterprise and Regulatory Reform to ensure that viable businesses can access government guarantees. These figures show that banks are still lending to UK businesses.

January's rise in lending reversed the previous month's movement when overdraft balances were reduced by receipts of single farm payments. Deposits fell by £1,513mn in the first month of this year, in part reflecting small businesses tax payments.

Commenting on the data, BBA statistics director, David Dooks, said:

"There have been net rises in term lending to small businesses each month since last Autumn, albeit at levels below last year's monthly average, reflecting subdued business investment in the economic downturn. At the end of last year, the outstanding level of term lending was some 9 per cent higher than a year earlier. The many small businesses that don't borrow are drawing on cash reserves to fund current cash-flow needs, such as January's tax payments. Despite the recession, people are still embarking on new business ventures, as shown by the number of new start-up relationships in early 2009 being in line with last years average."

For further information, please contact:
Brian Capon, Assistant Director, Media (020 7216 8810 brian.capon@bba.org.uk )
David Dooks, Statistics Director (020 7216 8837 david.dooks@bba.org.uk )

Notes to Editors:

1. The Bank of England Regional Agents’ summary of business conditions, though not specific to small businesses, is an appropriate economic assessment for reference. It shows that demand for consumer services continue to shrink, retail sales values are similar to a year earlier, investment intentions are reduced, with tighter financing conditions being a factor in those decisions, manufacturing output for domestic sales has fallen, construction and business service activities have contracted, export orders have slowed and employment intentions have been scaled back.

2. Although clubs, charities and societies operate small business accounts with banks, their activities are not commercial in nature and are therefore not covered by these data.

3. Small businesses are defined here as those commercial businesses with an annual bank account turnover of £1 million or less.

4. Individual banks contributing to this survey are Abbey (inc Alliance & Leicester), Barclays, Clydesdale (inc Yorkshire Bank), HSBC, Lloyds Banking Group (inc HBOS), Royal Bank of Scotland (inc NatWest) and The Co-operative Bank.

5. The statistics section of the BBA website (www.bba.org.uk) provides information on bank support for small businesses, whilst the Policy Issues section contains a Small Business area, dedicated to providing practical help and advice for small businesses, including a business account finder.

6. The BBA is the leading UK banking and financial services trade association and acts on behalf of its members on domestic and international issues. Our members, from 50 different countries, collectively provide the full range of banking and financial services. They operate some 150 million personal accounts, contribute £50bn to the economy, and together make up the world’s largest international banking centre.

Related Links

Small Business Stats - Jan 09 (PDF)

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