Despite the long fall in lending to businesses, the Bank of England announced on Wednesday that Loans have become cheaper and more readily available to the UK corporate sector during the last quarter of 2013.
The Bank said that “lenders reported that the availability of credit had increased for small businesses and large private non-financial corporations.” Availability is also set to increase into 2014.
Although the report states that loans are cheaper, demand for credit from small businesses was flat. Leep Hopley, chief economist at EEF suggests that “the issue of cost is still lingering for smaller businesses.” There was a small increase in demand from big companies, whilst medium sized companies were taking the biggest advantage from the easier conditions.
Credit has also become increasingly available for mortgages in the last three months of 2013, particularly on properties with high loan-to-value ratios.
The news that credit is becoming more available suggests that there is an increased appetite for risk from finance providers. Whilst it is encouraging that loans are becoming cheaper and more available, it is hoped that this translates into a noticeable increase in corporate lending.