Banks’ support for SMEs - July to December 20111
20/03/2012

David Dooks, BBA statistics director, said of the new datasets:

"With lending of £108bn and deposit holding of £113bn at the year-end, the level of bank support for non-financial SMEs in the private sector is clear. During the second half of last year, there were more than 226,000 new credit facilities approved for nearly £17bn. These figures reflect application approval rates of around 77% for smaller businesses and around 90% for larger businesses.

“It is the case that whilst almost £13bn of new loans was drawn down in the second half of last year, SMEs made repayments of £14bn, leaving the total stock of borrowing marginally lower at the year-end.

“Lending facilities approved in the second half of last year proportionately reflect the spread of industry sectors and regions in which SMEs operate”.

Please find the full release and excel tables via the links below.

Notes to Editors

1. Contributors to these regular datasets are Barclays, HSBC, Lloyds Banking Group (including HBOS), National Australia Bank UK (Clydesdale, including Yorkshire Bank), Royal Bank of Scotland Group (including NatWest), Santander and The Co-operative Bank.

2. SMEs covered are private sector businesses (sole traders, partnerships, limited companies) but NOT the following:

a. Clubs, charities and societies operating business accounts with banks, because their activities are not typically commercial in nature and are not covered.
b. Financial sector businesses are not covered.

3. The provision of credit is not restricted to business loans (structured over a fixed term period) and overdrafts. Banks also provide business credit cards and asset-based finance (such as hire purchase, leasing, revolving credit, trade finance, invoice discounting, factoring, etc), but those products are not covered by these data.

4. These datasets are not consistent with the data published by the Bank of England for the Project Merlin agreement. That basis of measurement covered a much wider range of credit products provided across whole banking groups (ie including non-bank subsidiaries) for all UK businesses (ie including financial sector and non-commercial customers) and included rolled-over facilities in some cases.

5. The distinction between ‘smaller businesses’ and ‘medium-sized businesses’ is not exact – the notional differentiation of size is based on business turnover (with small segmentation for SMEs being up to £1m/£2m and medium segmentation being up to £25m), but operationally, banks consider many other business characteristics to position SMEs in either their standard business product range ‘smaller business banking’ segment or the more relational, ‘medium business commercial banking’ segment.

6. In aggregating data from banks, it is not possible to de-duplicate multi-banked businesses. There is no impact on lending or deposit data but in associated published tables, the numbers of businesses covered will include double-counting.

7. Net changes are adjusted where appropriate to remove the effects of reporting discontinuities or coverage breaks, thus reflecting underlying movements.

8. BetterBusinessFinance is the ‘delivery channel’ for initiatives coming out from the Business Finance Taskforce. Progress on the range of initiatives is detailed at www.betterbusinessfinance.co.uk