Bank lending to small businesses in the UK has dropped over the first six months of 2011, figures have revealed.
New loans for businesses with turnovers less than £1 million fell by 10% compared to the first six months of 2011.
£3.4 billion was lent in the 2010 period, falling to £3 billion in 2011. This equals a monthly average of £506 million according to the British Bankers’ Association (BBA).
This data will increase pressure on the banking industry, after the Project Merlin agreement, aimed at increasing the amount of money available to small companies, seems to have made little difference.
The BBA also revealed that businesses were increasingly hoarding cash reserves, in case overdraft facilities are suddenly withdrawn.
Deposits per month made by small business owners have increased from £288million in 2010 to £473 million so far in 2011.
With more and more businesses trying to hold money back rather than investing it, it is no wonder the economy is feared to be heading towards a double-dip recession.
Alternatives to bank loans and overdrafts?
As fears increase that overdraft facilities could be withdrawn at any time, could an invoice finance alternative be just what your business needs?
Why not get in contact with us today and have a no-obligation chat with one of our experts, to see if we can offer you a funding alternative to unreliable bank loans and overdrafts.
In over ten years, Skipton Business Finance has funded businesses in a variety of many ways and given access to funds that grow in line with their sales meaning that the solutions we provide are more flexible than a traditional bank overdraft. This means that the invoice finance solutions we provide, such as invoice factoring and invoice discounting, is the fastest growing alternative to a bank overdraft.