In the second quarter £490m was lent, up from £400m the year before – something the Bank attributed to improved economic conditions encouraging smaller firms to borrower and banks to make loans.
The biggest SME lenders in Q2 were Lloyds Group (£527m) and challenger bank Aldermore (£122m), while lending contracted significantly at Nationwide (£279m) and RBS (£266m).
Irene Graham, executive director of business finance at the British Bankers Association, said: “These new figures underline that banks are helping smaller businesses do what they do best – drive economic growth and create jobs.
“Banks are using the Funding for Lending Scheme to lower the cost of borrowing for businesses. This means that lenders are offering a range of highly competitive deals at a time when interest rates are already at a record low.
“Borrowers should feel confident about applying to their bank for finance. The SME Finance Monitor shows that nearly eight out of 10 businesses that applied for finance in the past 18 months were given the green light.”
Since the Bank of England launched Funding for Lending in August 2012 banks have drawn down £61.4bn in funding.
Carl D'Ammassa, group managing director, business finance, Aldermore said: “We are delighted to remain a top two lender to Small and Medium-sized Enterprises in the Funding for Lending Scheme.
“This highlights our commitment to helping small and medium-sized businesses to grow and demonstrates the importance of newer lenders in the UK.
“We know how important SMEs are to the continuing economic recovery and it is imperative that banks focus on providing flexible finance for SMEs, as well as wider support in the form of understanding individual business needs and good customer service. We pride ourselves on listening to our SME customers and giving them the support they need to invest in and grow their business.”
