Small businesses in southeast England are benefitting from a strong recovery in bank lending, leaving the rest of the UK trailing behind, according to new research from the British Business Bank.
Lending to businesses in the region surged, driving a 21% rise in approved loans and overdrafts across the UK in the first half of the year, marking the first positive movement in small business finance since the pandemic.
Data from the report reveals that while lending in the South East increased by 10% in 2023, other regions of the UK are still struggling. Last year, the number of approved loans fell by 9% across the country, with sharp declines in areas such as the North East and Wales. Moreover, the total value of loans approved dropped 18% nationwide, though the South East bucked this trend, recording a 21% increase in loan values.
Patchy recovery across regions
The uneven recovery in lending highlights the growing divide between the southeast and other parts of the UK. The British Business Bank noted that while lenders have shown greater caution towards loan approvals, businesses in the South East have managed to secure much-needed finance, helping boost economic activity in the region.
Louis Taylor, chief executive of the British Business Bank, said: “To the extent that there is an increase in the provision of bank finance to small businesses, credit card growth is the largest, overdrafts as well, and also leasing [asset finance], which has seen an almost post-Covid boom.”
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