Banks report rise in company lending

26/02/2008

The British Bankers' Association (BBA) has revealed that its members lent a considerably greater amount of money to companies around the UK in January than has been the case in recent months.

According to the BBA, lending to companies increased by around £23.5 billion last month, which is more than double the comparative figure for December 2007 and almost three-times greater than the previous six-month average.

The bulk of the additional lending was accounted for by financial business and the BBA has said that the figures for last month were "temporarily inflated by short-term sale and repurchase transactions that are expected to unwind in the coming months".

Many businesses in the UK have turned to debtor finance and invoice discounting deals in recent months following what is widely seen as a greater reluctance among banking groups to lend money to small and medium-sized firms.

Meanwhile, the training services business the ILX Group recently revealed that it had secured an invoice finance deal with Barclays Bank worth close to £1 million.