Business lending hits £34.5bn in second quarter

Latest figures from UK Finance have indicated that gross lending of £34.5 billion in the second quarter was, in a single quarter, 50 percent more than the annual total in 2019.

Figures also showed that ,more than a million businesses had applications approved for finance under Government schemes by the end of June. Un-utilised overdraft facilities and invoice finance options provide businesses with a degree of financial flexibility during lockdown.

Receipts from the Coronavirus Job Retention Scheme, along with business rates suspension and other temporary tax relief measures reduced operating expenses for businesses and resulted in a 20 per cent increase in deposit holdings since the beginning of the year.

SME finance was widespread across regions and sectors but was particularly marked in hard-hit service industries.

Stephen Pegge, Managing Director of Commercial Finance said “With lockdown support measures fully operational in the second quarter, our data shows that many companies still had a degree of financial headroom from a combination of existing facilities and deposits, but the demand for additional support was substantial.”

“Gross lending for Q2 was up 50 per cent on the entire annual total in 2019, reflecting this significant demand with new overdraft facilities as well as the Government’s business interruption finance schemes providing support. “The finance industry continues to work closely with government and regulators to deliver the support schemes alongside its usual assistance measures to help viable businesses as they plan for recovery.”

The UK Finance figures provide a regular analysis of how the finance needs of small and medium-sized enterprises (SMEs) are being supported through lending from mainstream lenders and specialised finance providers.