SME lending increases

Big banks increase small business lending

Big banks' lending to UK small and medium-sized enterprises (SMEs) has seen its first notable rise in almost two years, with gross SME lending rising 15% in Q1 2024, reaching its highest level since the end of 2022. According to UK Finance, the majority of small business lending now comes from outside the big banks, as SMEs turn to alternative providers. New SME finance approvals among high street banks also jumped 27% in Q1 2024. The data points to small firms' rising demand for borrowing amid a more positive outlook for the UK economy. SMEs continued to reduce their stock of cash deposits, but still retain a significant savings buffer. SME finance repayments remained stable in Q1. "It is encouraging to see further signs that SME demand for finance is returning," said David Raw, managing director of commercial finance at UK Finance.