30th June 2017

Bank Support for SMEs – 1st Quarter 2017

Mike Conroy, BBA, Executive Director, Corporate and Commercial Banking said:

“The first quarter of this year saw an upturn in applications for loans and overdrafts from SMEs, although volumes were lower than at the same time a year earlier. Some 8 in 10 applications were approved and around £5.3bn of new lending was provided to support SMEs across regions and industry sectors”

SME net borrowing

SME borrowing facilities at the end of Q1 2017 stood at £109.7bn, of which structured term loans were £85.1bn, overdrafts were £9.4bn and facilities available but undrawn were £15.2bn.

New loans less repayments resulted in net lending of £294mn, the largest positive monthly movement for six months. However, overdraft levels fell by £200mn, so that borrowing levels overall were little changed.


Number of loan & overdraft applications and percentage approved

There were 11% fewer loan applications in the first quarter of 2017 compared to the same quarter a year earlier. A total of 34,959 loan applications were made in the quarter.

The number of overdraft applications in the quarter (51,400) was slightly higher than in Q1 2016 (48,742).

Approval rates in the quarter were:
Smaller businesses – Loans 80%, Overdrafts 77%
Medium businesses – Loans 88%, Overdrafts 96%


Value of loan & overdraft application approvals

Reflecting a slight increase in the number of loan applications in Q1, aggregate approved loan & overdraft facilities of £5.3bn was some 7% higher than in Q4 2016, although this total value was some 13% lower than in the same quarter of 2016.

£1.4bn of loan facilities and £0.5bn of overdraft facilities were approved for smaller businesses.
£2.5bn of loan facilities and £0.8bn of overdraft facilities were approved for medium businesses.

The average loan value approved for both smaller and medium-sized businesses in the quarter reduced to £68,614 and £387,174 respectively.


SME deposit account balances

Cash held by SMEs in current and deposit accounts totalled £170.9bn at the end of March 2017, some 6% more than a year earlier. Much of this growth was in current account deposits, reflecting increased cashflow holdings.

At the end of March, £104.2bn of cash was held in current accounts and £66.7bn in deposit accounts.