Small Business Loans: Approvals Halved Since 2007
The number of secure loans granted to businesses was 46% lower last year than in 2007, data from Companies House has revealed.
The research from Companies House found that 88,000 fewer secure business loans and mortgages were registered in 2010 than in 2007.
However, British Bankers Association (BBA) spokesman, Brian Mairs, said the fall has been primarily caused by fewer small firms applying for finance, rather than banks turning down applications.
“Before the recession, there was a period of easy credit. Now firms are trying to reduce their reliance on lending.”
“Our own [recent] figures showed that four out of five applications are being approved. But banks are being more careful and asking more searching questions. They want to know what the firm needs the money for and how they will repay it.”
Graydon UK managing director, Martin Williams, said the Companies House figures were typical of what had happened to small firms applying for finance over the last few years, but disputed that the drop was just caused by fewer loan applications.
“Of course there is an element of small firms battening down the hatches in a recession and not wanting to extend themselves by applying for lending. But the BBA can’t deny that there has been a credit crunch and that the lack of lending is not just down to a drop in demand.”