The number of companies in the UK which were granted commercial small business mortgages and business loans has dropped by 46 per cent over the past three years, sources say.
One commercial credit referencing agency recently conducted research into the number of firms that have been successful in securing finance throughout the last decade. What Graydon UK has discovered is that Companies House has registered many less business loans and mortgages given to even the best business bank accounts recently.
Graydon UK’s results revealed that in 2010 there were 88,000 fewer loans and mortgages registered than there were in 2007. The managing director of the firm stated that the findings highlighted how much businesses have had to tighten their belts in the face of the lack of available finance.
Managing director Martin Williams stated that the recently discovered figures give credence to the view commonly held that bank lending has been held back significantly during the economic downturn. However he stated that the fall in new charges and loans registered at Companies House has been dramatic.
Mr Williams added that banks are sure to be on the receiving end of more pressure from the government to increase the availability of venture capital to new and existing businesses this year. Failure to do so on the part of the banks may result in these banks facing an even higher bank levy.
The lack of proper levels of business lending has been on Downing Street’s mind for several months. This past October, six business bank account providers presented a study regarding the depressed business loan figures.
At the time of the October study, the financial institutions offered a remedy by proposing a new £1.5 billion investment fund. The fund would be made available to select businesses that could prove their viability. The investment fund would start at approximately £300 to £350 million and then be ramped up to the larger figure over time.