Banks lend more to small firms in sign credit crunch is easing

 
Tim Wallace
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LENDING to businesses has bounced back in the past three months, a Bank of England survey showed yesterday.

The number of banks reporting firms have better access to credit outweighed the number saying the situation was worse by a margin of 22.2 per cent in the final quarter of 2013, the credit conditions survey said.

The recovery in the economy and banks own improved access to capital markets were the biggest two contributing factors, the Bank of England study found.

A net balance of 12.7 per cent of banks said availability was improving for small firms, and a balance of 13.1 per cent said the same for the biggest companies.

Business groups welcomed the findings, as constrained lending has been blamed for some of the slow growth of recent years.

“This news should give another boost to business confidence, especially for smaller firms, where demand for finance is still subdued,” said Matthew Fell from the Confederation of British Industry.