Commenting on the latest BBA High Street Banking Statistics, Louise Beaumont, Head of Public Affairs at GLI Finance said:
The latest figures from the BBA show that borrowing increased in January after a lacklustre December. While this is welcome news, this does not mask the fact that SMEs still continue to face significant challenges in accessing the capital they need to thrive. Indeed the latest Bank of England lending figures highlighted that there has only been a very modest overall increase in lending to SMEs over the last twelve months.
It is crucial SMEs have access to the finance they need to grow as they are the lifeblood of the UK economy. For instance, a report produced by GLI Finance in conjunction with the University of Cambridge in November 2015 highlighted that raising awareness levels amongst SMEs could add up to £20 billion to the UK economy by 2020. It also illustrated that UK SMEs have had £5.7m withdrawn a day in small business overdrafts since 2011, which has cut available credit by £8.4bn representing a significant drop of 40% in four years, resulting in an estimated £3bn loss to the economy. Recent figures from the FSB highlight that fewer firms are even applying for finance because they know that when they ask they get a credit review and their overdraft cut.
The UK Government has made important progress in raising the profile of alternative finance as a complementary force in the financial services landscape by implementing supportive legislation and regulation. It is now crucial that it continues to build on these initial successes by working closely with the industry and key stakeholders to ensure SMEs are more aware of the benefits of being able to access the right type of capital at the right time.