Home Business NewsBusiness Business lending to increase this year, but still far below 2008 peak – EY

Business lending to increase this year, but still far below 2008 peak – EY

by LLB Reporter
10th Feb 14 10:17 am

Financials services lending to British businesses is expected to grow 2.5% this year, to £417bn, but that’s still some 27.5% below the 2008 peak, according to a new report from the EY Item Club.

The report expects business lending to increase 4.8% each year on average from 2014 to 2017, but this has been revised down from the 5.3% the economic group was forecasting last quarter.

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EY Item Club says that the weakness of financial services lending to businesses may have been in part down to the rise of alternative finance, such as “peer-to-peer lending, crowdsource funding, venture capital funds and finance from insurance and pension funds”, “albeit in low levels”.

The report says: “Prudent lending practices by banks are likely to prevent a return to the lending levels seen before the global financial crisis.

“By 2017, we forecast business lending to approach £500bn, still about 15% below 2008 levels.”

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1 comment

melanie burgess February 14, 2014 - 11:43 am

27.5% is quite a difference! It will be interesting to see how this year shapes up in terms of lending, particularly given the impact recent flooding has had on many small businesses who will need financial help to recover.

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