New Funding for Lending Scheme (FLS) figures show a £435 million decrease, however British Banking Association (BBA) director Irene Graham states that there has been an increase in borrowing by small and medium sized businesses.
Although the overall amount borrowed reduced by £435 million in the second quarter of the year lending is at an all time high for SMEs at £43 billion suggesting that the FLS is proving successful for small businesses.
The scheme was initially created in 2012 in order to make loans more readily available for business owners. It was set up as part of movement to support the economy and prevent any further financial damage to the self employed or business owners.
Figures released last week from the BBA show that despite an overall decline in the amount of money being lent to companies, SMEs have seen a £100 million increase in the volume of money being borrowed. Deposit levels for small organisations have also risen by 9% in the second quarter of the year.
The Federation for Small Businesses confirmed positive news for SMEs by reporting a serge in the number of successful loan applications, rising by 9% in the second quarter of the year.
This is promising for small business owners as they can be assured the FLS is working in their favour. Due to recent economic problems some directors have been looking for alternative methods of borrowing money such as peer-to-peer lending. However the release of these figures by the BBA should convince organisation owners to revert to traditional lending.
For small and medium sized businesses this scheme will improve their prospects, this new financial support will give small businesses a boost. If you are a small or medium sized business owner looking for accountancy advice please do not hesitate to get in touch with us by calling 0161 707 1500 or via our contact page.