LONDON , Dec. 18 -- The British Bankers' Association issued the following news release: The Agents' Summary of Business Conditions and the FSB's Small Business Index, both published today show increasing optimism for businesses in 2014. Commenting on the two reports, Richard Woolhouse , the BBA's Chief Economist said: "Today's reports show that businesses feel more confident and are finding it easier to find credit. We hope this will encourage more firms to invest in 2014 and apply for finance. "Official figures show that gross lending to SMEs has been rising strongly in recent months. As borrowing costs for businesses remain low there has rarely been a better time for businesses to apply for finance." For more information please contact the BBA press office on 0207 216 8989 Notes to Editors Bank of England figures show new lending is increasing: - In every quarter this year banks have lent more than Pounds10 billion in new lending to SMEs - Bank of England data shows that gross lending by banks to SMEs began to rise in April this year and has risen every month for the past six months year on year. Gross lending in October 2013 was 28 per cent higher than in October 2012 . The amount of new lending during the last three months was up 16 per cent on the same quarter a year earlier. See graph here Over recent years the difficult economic climate has suppressed demand for finance: - Banks are committed to increase demand through initiatives such as Better Business Finance and providing help and support through Mentorsme.co.uk. However, 78 per cent of SMEs interviewed in the latest SME Finance Monitor said they did not seek external finance, nor did anything stop them from doing so - FSB figures published in today's Small Business Index show that fewer than 16 per cent of firms applied for credit during the past three months, falling from 19.3 per cent a year ago SME Finance Monitor: - The SME Finance Monitor investigates the availability of external finance for the UK's SMEs. The largest and most frequent study of its kind in the UK , the research is commissioned by the Business Finance Taskforce and is produced independently under the governance of an external Chairman and a Steering Group - A full copy of the SME Finance Monitor is available at: http://www.sme-finance-monitor.co.uk/ Key findings of the Q3 2013 SME Finance Monitor include: - Businesses are more likely than they think to get funding they need - confidence that the bank would lend remained below the actual levels of success reported to date. Fifty per cent were confident that their renewal would be successful, compared to current success rates of 94 per cent, while 25 per cent were confident about a new facility, compared to a 46 per cent success rate - Approval rates - 7 out of 10 loan and overdraft applications to date have resulted in finance over the 18 month lifespan of the Monitor - Slight increase in business confidence - 41 per cent were confident that the bank would lend (up from 30 per cent in Q2), as smaller applicants regained some confidence (40 per cent from 29 per cent) Larger potential applicants continued to be more confident of success (57 per cent in Q3) - Most discouragement indirect - 7 per cent of SMEs in Q3 2013 met the definition of a 'would-be seeker' of external finance, who had wanted to apply for a loan or overdraft but felt that something had stopped them. This proportion has been stable in recent quarters. Overall, almost all the discouragement was indirect (the SME assuming they would be turned down and so not applying) - Risk profile of businesses - the proportion of SMEs rated a worse than average risk increased slightly, and is currently 54 per cent - Three quarters of all SMEs don't want finance - 78 per cent of SMEs interviewed said they did not seek external finance, nor did anything stop them from doing so. Forty per cent of SMEs met the more specific definition of a 'permanent non-borrower', those SMEs that had not used, nor wanted to use, external finance, nor have any plans to apply for any in the near future - Awareness of finance initiatives - 56 per cent of SMEs were aware of any of the initiatives tested in Q3, up from 52 per cent in previous quarters TNS 18EstebanLiz-131219-30FurigayJane-4582960 30FurigayJane
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