News > January 2012 > Small business lending 'has fallen to new low'

Small business lending 'has fallen to new low'

04 January 2012

Lending to small businesses including the sole trader has fallen to a new low, according to a poll carried out by one organisation.

Syscap found that the amount loaned to small companies under the Enterprise Finance Guarantee (EFG) decreased to £91.8 million in the quarter ending September 30th 2011, SME Web reports.

This was down 36 per cent from £143.9 million in the same period in 2010 and represents a record decline.

As a result, chancellor George Osborne has decided to cancel his plans to focus on finance for companies generating £25 million a year or less and will instead include those with a turnover of up to £44 million.

However, Syscap's Philip White said this could be detrimental, as banks may have lent to these slightly bigger organisations anyway.

"What we need is targeted, pragmatic and unbureaucratic measures aimed at getting lending and asset finance to businesses with less than £25 million in turnover," he added.

In November 2011, BDRC Continental found that 12 per cent of small to medium-sized enterprises want to borrow money but have not applied.

Filed under: EFG, sole trader