While overall corporate lending increased over the first quarter of 2013, according to the Bank's Credit Conditions Survey, this change was not felt by smaller businesses. As Adam Marshall, director of policy at the British Chambers of Commerce, puts it;
"Although the overall supply of credit to businesses increased for the second successive quarter, it is concerning that the rise was confined to big business, while SMEs continue to be left out in the cold by lenders."
Economist Howard Archer, of forecasting firm IHS Global Insight reflects on the findings, commenting;
"The survey adds to the pressure on the Bank of England and the government to come up with further measures aimed at boosting bank lending to businesses, with the focus particularly on easing credit conditions for smaller companies."
The situation for SMEs looks set to deteriorate before it improves, as lenders forecast mainstream banks will continue to cap lending in the second quarter in an effort to build up cash reserves. Demand for credit, on the other hand, is expected to pick up over the coming months, as muted growth in the colder months gives way to optimism for small and large businesses alike.
Recognising the importance of shaking up the UK banking system, Aldermore has taken a stand to champion the needs of SMEs and improve access to vital financial support. The Bank has already enabled many small British businesses to reach their true potential and will continue to work towards reversing the restricted lending trend as we progress into the second quarter of 2013.
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