UK circling the drain in business bank account lending

When it comes to offering credit to businesses – especially small business bank accounts – the UK has been circling the drain in the years following Lehman Brothers’ collapse in 2008, new research recently found.

The issue of lenders refusing to agree to business loans was highlighted by UHY, the accounting firm that conducted the research survey.  According to UHY’s findings, UK business lending has declined by 13 per cent since the peak of the credit crisis, with the only other G8 country lagging behind being the US.

In fact, the total worth of the entirety of outstanding lending made to businesses in need of working capital in the UK currently stands at £423 billion.  However, in December of 2008. the figure stood at over £487 billion.

The UK has been outstripped by all the rapidly developing world economies in regards to new business lending.  Lenders in China have increased their activity by 65 per cent since 2008, and India, Russia, and Brazil have all experienced lending growth in the double digits.

The UK, by contrast, lies at 18th place in a field of 22 countries.  The US, whose lending has dried up even more, has declined by 18 per cent, and Ireland rounds out the bottom with an eye-watering 42 per cent drop in lending.

The research indicates that the Government has had little success in its efforts to increase business lending in the wake of the worldwide economic crisis.  The much-touted Project Merlin initiative, an understanding between the Government and High Street retail banks, fell short of its lending levels within the small and medium sized business enterprise sectors.

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