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Business lending 'fell during May'

Date Added: 04/07/2012  

New figures have shown business lending was down during May, indicating companies up and down the UK may be struggling to access the finance they need to grow.

The government has repeatedly stated it believes the future growth of the economy is dependent on the success of small to medium-sized enterprises, but many may need to take business debt advice as they cannot get the loans they need to continue.

Data released by the Bank of England earlier in the week revealed net business lending was down by £1.7 billion over the course of the month, reports City AM.

This reverses a rise of 0.4 per cent that was seen in the figures for April and shows how hard many companies are finding it to secure the funding they need to continue their operations.

The quarterly fall is therefore shown to be 2.9 per cent, with no signs the situation is going to improve for organisations in the coming months.

Mortgage approvals fell to 51,098 in May, according to the data from the Bank of England, from a 25-month high of 58,572 in January.

IHS Global Insight's Howard Archer said: "Housing market activity is persistently low compared to long-term norms and while it may eventually be lifted by more mortgages being granted at decent interest rates under the 'funding for lending' scheme announced by the Bank of England, this is unlikely to be a major factor in the near term."

Earlier in the month, head of sales at Funding Circle Laura McMullen claimed there is a need for a revolution in business lending, in order to ensure companies have the access to the loans they need to grow and boost the economy as a result.

She explained the application process for a loan from the country's major banks is "snail-paced" and needs to be overhauled if firms are to avoid being served with a winding up order.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Michael Beam

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