19-05-2025
Lending gap for small businesses ‘is hurting UK's growth'
A £90 billion 'lending gap' in the provision of bank finance to the UK's small and medium-sized companies is holding back investment, productivity and economic growth, a study has found.
Research into lending trends over the past four decades found that a 'credit shortfall has developed particularly in productive SME lending for growth and working capital' and that this was a possible reason behind the UK's persistently weak growth and productivity.
A 'heavy shift' towards low-risk lending that is backed by property has resulted in a dysfunctional business finance market, the report by Allica Bank found.
UK bank lending to companies had fallen 'well below the historic trend' levels, Allica said, with lending to SMEs £90 billion lower than it would have been had it
