BANK lending to non-financial firms fell by another £0.5 billion net of repayments in the three months to February according to official research, which suggests credit conditions were toughest for small and medium-size enterprises.
The Bank of England said lending to SMEs and to large firms fell during the period, without specifying by how much in each case.
In its latest Trends in Lending report, the bank noted large firms have access to more funding sources than smaller businesses, including bond markets on which they raised £1bn net in the quarter to February.
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The bank said the spreads on the interest rates charged over base rates fell significantly for large businesses in the first quarter of 2014, but pricing on lending to SMEs was broadly unchanged in recent months.
Noting the Trends in Lending Survey was launched amid the downturn in 2009, the bank said: "The growth rate in the stock of lending to SMEs has been negative for the past four years across a range of measures, though has contracted by less since the start of 2013."
The bank said the official Funding for Lending scheme had fed through to significant improvements in credit conditions since its launch in July 2012.
It added: "Over the past year, credit availability has eased for firms of all sizes and all sectors, according to a survey by the Bank's Agents conducted during February and March."
Bank lending to non-financial firms fell by £3.3bn net of repayments in the three months to January.