This was more than the amount of new lending in February and repeated the February to March improvement seen last year.
The number of new fixed-term loans rose to a recent monthly high of nearly 14,000. After loan repayments and reduced overdraft borrowing, total lending outstanding on loans and overdrafts was little changed at around £55bn
Over 58,000 new banking relationships were established by small businesses in March, more than in any other month since the BBA started collecting monthly data in late 2008.
Improved cash positions for small businesses are reflected not only in reduced overdraft borrowing, but also in a rise in deposits.
BBA statistics director, David Dooks, said of the latest data: "A higher number of fixed-term loans in March generated the largest monthly amount of new lending since last July. Spring usually sees increased business activity and the bad weather may have pushed some borrowing intentions into March but nevertheless, more bank finance was made available.
"Small business liquidity may be improving, with March seeing higher cash holdings and reduced overdraft borrowing."
