Commenting on the data, Stephen Pegge, Managing Director, Commercial at UK Finance said “The number of new approved loans to SMEs grew slightly in the first quarter of the year, driven in part by increased demand in the manufacturing and production industries. SMEs should feel confident about applying for credit to grow and expand, with banks continuing to approve eight in 10 applications for finance.”

Christoph Rieche, co-founder and CEO of iwoca said: “UK Finance data shows that since 2011, the number of approved business overdrafts has declined by nearly 30%, despite consistent growth in the number of active small businesses – businesses with £1m to £2m in turnover.”

“This situation cannot continue, especially at a time of weakening economic growth. Access to flexible finance is critical for small businesses to improve productivity and compete. In the last year alone.”

Highlights from the report:

  • There were 73,971 new loan approvals to SMEs across the UK in Q1 2018, a slight increase from 72,272 in the first quarter of 2017.
  • The number of new loan approvals in the production and manufacturing industries increased to 23,707, up from 22,868 in the same quarter last year.
  • Total net deposits in the SME sector amount to £173bn, exceeding outstanding borrowing of £95bn.
  • There was little net change in the stock of SME lending in the first quarter, as amounts of both new lending and repayments were more than 10 per cent lower than in the same quarter a year earlier.