UK net lending to small businesses up for second quarter of 2015

Net lending from banks and building societies to small businesses rose to £490m in the second quarter of 2015, according to data released by the Bank of England on its Funding for Lending Scheme (FLS).

The scheme, which launched in August 2012 to stimulate the UK economy by incentivising banks to boost their lending, has resulted in banks drawing down a total of £61.4bn of funding to date.

Lloyds Banking Group and Aldermore were revealed to be the biggest net lenders to small and medium-sized enterprises during April to June of this year -£527m and £122m respectively – while Nationwide Building Society and Royal Bank of Scotland’s lending reached £279m and £266m.

The figures are in stark contrast to the contraction of £400m – the “disappointing” lending drawn down by the scheme during the same period a year ago -and are said to be indicative of the economy improving as more small firms look to borrow.

Tim Hinton, managing director of mid markets and small and medium enterprise banking at Lloyds Banking Group, said:

“The Bank of England’s figures show that during the second quarter of 2015 Lloyds Banking Group grew its net lending to small and medium-sized businesses by £527m.

“We have seen how successful FLS has been in helping small businesses grow with competitively priced funding, helping us to increase our small business net lending by 23% since the start of 2011 while the market reduced by 16%. We remain committed to participating in FLS, enabling more small and medium-sized businesses to grow and help Britain prosper.”