Lending becoming easier?

According to a new survey by the EEF, the manufacturers’ organisation, the availability of finance for small companies seems to be getting slightly better in the second quarter of the year.

Just as many small companies reported an increase in the availability of new lines of borrowing over the past two months as reported a decrease. This compares with a balance of minus 11% in the previous quarter.

There was a similar improvement in the balances among mid-size companies. For existing credit facilities the balance of companies reporting decreased availability dropped from 11% to 7% amongst manufacturers.

The EEF report was based on the comments of 476 companies interviewed between 4 and 25 May.

Commenting, EEF Chief Economist, Lee Hopley, said:

For the first time since the recession ended, manufactures are reporting improving access to finance. Hopefully, this will translate into better news on new lending in the coming months. But availability is only part of the story and we also need to see costs coming down.

‘Ensuring companies have access to the finance needed to invest and grow is critical for the recovery. We need to see a sustained improvement before concluding that the actions taken by banks and government are bearing fruit and that no further measures are required.’

The EEF’s survey provides a little hope for anyone disappointed by an earlier report that Project Merlin, the George Osborne’s plan to get banks lending to SMEs, was falling behind in its schedule.

Whatever the real picture is, Scottish entrepreneurs don’t seem to have been unduly disheartened. According to new figures from Business Gateway, Scottish start-ups have risen by 6.3% in the last year.

Business Gateway said the 11, 242 firms formed between April 2010 and March 2011, the highest number achieved since Business Gateway’s inception in 2003, an increase of 662 from the year ended March 2010.

New survey by EEF:

http://www.eef.org.uk/policy-media/releases/uk/2011/Availability-of-finance-begins-to-improve-for-Industry-.htm

Earlier report:

http://www.scotsman.com/banking/UK-banks-fall-short-of.6772611.jp

new figures from Business Gateway:

http://www.govopps.co.uk/business-gateway-records-highest-number-of-new-start-up-businesses/