Support for small businesses - 4th quarter of 2007
BBA figures for the main high street banks providing small business services show that:
- Term lending grew by 10 per cent over the year to £41.7 billion. Overdraft borrowing stood at £8.7 billion, a fall of one per cent over the year, reflecting lower dependency on temporary, cash flow finance.
- Total deposits were £54.1 billion at the year-end, an increase of eight per cent over the year.
- During 2007, new banking relationships were opened for 557,000 small businesses.
- 46 per cent of small businesses bank online.
BBA director of statistics, David Dooks, said:
"As borrowing growth moderated during 2007, the pattern of net credit balances for the small business sector has been restored. The main high street lenders continue to finance investment, while business liquidity has risen, suggesting that small businesses in general are in a good position to withstand pressures in the economy. The number of businesses supported continues to rise, though the rate of start-ups has slowed."
Notes to Editors:
- 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 60 different countries, collectively provide the full range of banking and financial services. They operate some 130 million personal accounts, contribute £50bn to the economy, and together make up the world's largest international banking centre.
- 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.
- In recent years, the proportion of borrowing on overdraft by small businesses has declined. Term loans are more prevalent, with well over three-quarters of term lending having a maturity of more than three years, with interest charged on a variable rate basis.
- Small businesses are defined here as those commercial businesses with an annual bank account turnover of £1 million or less.
- Individual banks contributing to this survey are Abbey, Alliance & Leicester Commercial Bank, Bank of Scotland, Barclays, Clydesdale (inc Yorkshire Bank), HSBC, LloydsTSB, Royal Bank of Scotland (inc NatWest) and The Coâ€‘operative Bank.
- The Statistics section of the BBA website 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.
- Previously released data may have been revised, as in the table below. Changes are adjusted where appropriate to remove the effects of reporting base changes, thus reflecting underlying business movements. Given the seasonal nature of support throughout a year, comparable figures for the same quarter a year earlier are shown.