Lending to SMEs (small-and-medium enterprises) in the UK that have taken advantage of the Bank of England’s Funding for Lending Scheme (FLS) has risen in the period from 1st April 2015 to 30th June 2015. In this period, lending increased by £490 million. This follows a net rise in lending of £648 million in Q1 of 2015 to this important sector.
The Funding for Lending Scheme was launched back in July 2012 jointly by HM Treasury and the Bank of England and appears to be a success. It provided an incentive to banks and building societies in the UK to financially support SMEs in so much as for every £1 banks advanced to SMEs the Bank of England will lend the banks £5. To date, a total of £61.4 billion has been provided by banks and building societies.
Lloyds Banking Group was the biggest net lender at £527 million in quarter 2 of 2015. Nationwide Building Society saw the biggest decline in lending to this sector with a drop of £279 million in the same period.
Could one of the reasons for greater lending being made available in the UK be due to a relaxation in credit conditions? There would also appear to be increased confidence in the business community about the economy here in the UK. Let us hope that this confidence continues into the future possibly resulting in a number of these SMEs growing to become large corporations.
Of course, there are numerous sources of lending to the small and medium sized business sector here in the UK so it is certainly worth shopping around to try to obtain the most competitive lending package to meet your requirements. In this respect, why not take advantage of the service provided by Connect Commercial Finance as we provide you with access to a specialist advisor who can help source the most suitable business lending product to meet your requirements.
The Start Up Loans Company started operating in September 2012 with the intention of providing loans at a reasonable rate of interest to businesses that have been established for no more than 2 years. Entrepreneurs are helped by a business adviser to complete a business plan and submit a loan application. Following drawdown of the loan a mentor will provide advice and guidance to owners to help grow the business.
Business loans are available for anything up to £25,000 and are repayable over 1 to 5 years. The interest rate is presently fixed at 6% per annum and there are no fees payable. Credit reference searches are undertaken but just because someone has a poor credit history does not necessarily mean that their application will be declined.
You may be interested to read that through the Start Up Loans Company the amount lent so far is £165,598, 349. Some 31,264 businesses have received financial support in this way. In total, 29 businesses have received funding each day. Of the applicants, 62% were male and 38% were female. The average amount of each business loan was £5,297. When looking at the age of business owners, 21% were in the 18 to 24 year age bracket, 32% were aged between 25 to 30, 37% were 31 to 49 years of age and 10% were 50 years of age or over. Interestingly, some 46% were unemployed before applying for a loan.
Obviously, finance has been provided to so many different types of business including the Cornwall Camper Company that restores and then rents out high-end VW Camper vans, the Yorkshire Meatball Company based in Harrogate who make and sell meatballs in their restaurant, Sturdy Cycles in Powys,Wales that build and sell quality bicycles, Bluebird Tea that sells loose leaf tea in Brighton and ShortCuts that is a child-friendly hair salon located near Milton Keynes where children can go and enjoy the experience of having their hair cut.