The Bank of England found SMEs repaid more than they borrowed for the third month running in September. The finding may heighten concerns small firms are still struggling to access affordable credit. The bank found SMEs repaid £642m net of new lending in August and £858m in July.
Last week the British Bankers Association said lending by the big high street banks to SMEs was stable in September. The organisation said big banks increased lending to non-financial firms by £2.5bn in September after reducing lending by a monthly average of £1.4bn in the preceding six months.
The Federation of Small Businesses said then about half its members were still reporting the availability of credit as poor while a third said it was unaffordable.
Yesterday experts noted the Bank of England found the total of new loans made to SMEs increased to £3.3bn before repayments in September from £2.8bn in the same month last year. Lending to SMEs increased in each of the past four months, compared with the comparable period last year.
New loans to SME totalled £3bn in August.
Howard Archer, chief UK economist at IHS Global Insight said the fact net lending to non-financial firms rose £720m in September lifted hopes banks were more prepared to lend given the improved economic outlook. He said; "It may also be evidence that the Funding for Lending Scheme may be starting to have more of a positive impact."
Firms may still be repaying more than they borrow from lenders not included in the BBA data. The organisation collects data from around 20 of the biggest lenders. The Bank of England data cover more than 300 firms.
Unsecured consumer credit rose by £411m in September, compared with £620m in August and a 2013 high of £683m in July. It averaged £160m monthly in 2012.