Net lending to small and medium-sized businesses was
positive during four of the six months to March 2015, increasing by 1% from
December 2014, while net lending to large businesses increased almost by 2%
during the three months to March 2015. Gross lending to all businesses has
registered growth since the start of 2013, mainly due to an increase in the
availability of credit. Outstanding lending declined during 2014, despite
increased gross lending, due to a substantial growth in repayments: 15%, 13%
and 22% for small, medium-sized and large business respectively.
Interest rates remain at a historic low, and have
been falling consistently since the Bank of England cut the central bank rate
to 0.5% in 2009. The Bank for England’s quarterly Credit Conditions survey
found that lending rates to small businesses remained broadly unchanged during
the first quarter of 2015, while respondents indicated that rates had fallen
significantly for medium-sized and large businesses.
The government has made several attempts to
reinvigorate business lending over the last couple of years, however its
projects have failed to have the desired effect. The flagship Funding for
Lending scheme (FLS) began slowly and fell short of its initial GBP80 billion
target by GBP20 billion in 2012. However, improvements have been made seen
since 2014, and a substantial increase in the money lent through the FLS
directly led to both outstanding stock for small and medium enterprises (SMEs)
and new term lending to large business increasing. Project Merlin – the
Government’s agreement with the ‘big four’ banks to increase lending to small
businesses – fell GBP1.1 billion shy of its initial target.
The rise of the emergency 0.5% bank rate is set to
make access to credit more expensive for banks, and subsequently, for
businesses. With banks already wary of lending to smaller businesses, this may
result in a decline in loan approvals, while businesses themselves are likely to
be deterred by the prospect of more expensive loans. The Office for Budget
Responsibility (OBR) altered its forecast in March 2015 and anticipates the
rise to occur in mid-2016, as opposed to later this year. This gives banks and
businesses extra time to prepare for the additional costs while the economy
grows.
The industry is dominated by mainstream banks, with
the ‘big four’ of Royal Bank of Scotland, Lloyds, Barclays and HSBC controlling
over 80% of the market. Regulations and high costs make it a difficult industry
to enter. Therefore, any real competition is sparse, although peer-to-peer
lending has risen sharply over the last few years – it almost doubled in 2013 –
after offering smaller businesses a viable alternative if bank loans are
unavailable or too expensive.
The main theme throughout the review period was new
lending recovering and growing substantially in the latter years - 13.4%
thought 2014 - but the outstanding stock of business lending continued to fall
due even sharper growth in repayments, which reached 15.3% in 2014 from 2013.
Scope
- This report provides market analysis, information and insights into the UK business lending industry.
- It provides a breakdown of the types of business loans in the UK.
- It analyses drivers and the outlook for the market .
- It provides information on the main banks in the UK market.
- It covers news and regulatory developments.
Reasons to Buy
- Gain an understanding of the UK business lending industry
- Access monthly and annual statistics on every aspect of the market, both in written form and in graphs and tables.
- Read analysis of the relevant market statistics, detailing what has been happening in the lending to business market for both SMEs and large businesses, why it has been happening, and what to expect in the coming years.
- Read about the economic factors impacting the market.
- Read about how individual banks and building societies are affecting the market, in terms of market share and innovation.
Key Highlights
The stock of lending to businesses suffered greatly
during the financial crash and has been in constant decline since. Strong
growth in repayments, due to companies' increased fear of debt has been the
main factor, but improving economic conditions make growth likely over the
forecast period.
Spanning over 70 pages “Unsecured Loans to Business in the UK - Key Trends and
Opportunities to 2019” report covers Executive
Summary, Introduction, Market Analysis, Economic Backdrop, Competitive
Landscape, Regulation and Policy, Deals, News, UK Retail Banks, Statistics,
Appendix. The report covered companies are - Santander UK Plc, Royal Bank of
Scotland Group Plc, HSBC Bank Plc, Barclays Plc, Lloyds Banking Group Plc,
HSBC, Nationwide, Zopa, Funding Circle, RateSetter, Market Invoice, Lend Invest.
For
more information visit: http://mrr.cm/49r
To
browse more Banking Reports visit: http://www.marketresearchreports.com/banking
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