Banks increase loans to businesses

17 June 2009

The main UK high-street banks have been increasing their lending to businesses - not just to existing customers, but to customers of other lenders who have cut back on the loans they are providing.

This is according to recent figures from the British Bankers` Association (BBA).

A report by the Institute of Directors, meanwhile, shows that in Northern Ireland, 93% of businesses have been able to renew an existing bank loan and 80% able to renew an existing overdraft, while 63% of respondents said they were able to extend an existing bank loan.

The BBA website does point out that loan providers are taking steps to protect themselves against the effects of the recession. They`ll look at each company`s cash flow forecasts and risk exposure, for example, and look at the company`s customers too - if it was too reliant on too few large customers, losing just one could make it hard or impossible for the company to repay the loan.

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