The Bank of England released its most recent report on credit conditions, revealing some interesting, but not surprising, things. The bank reports that small business demand for loans has dropped, while high street banks continue to keep charges where they have been or higher. In fact, the findings state that lenders were raising fees on home loans to a point higher than any of their own cost increases would demand.
While the credit call from small business fell, the banks did nothing to lower their rates in any attempt to gain new business. Among the banks that increased their number of loans to small business, most said that they were doing it as part of a strategy to garner more of the market share.
Some wonder if this could be a signal that at least some banks are once again willing to compete for the small business market. This thought was deflated when the report went on to say that the lion’s share of lending institutions do not intend to increase lines of credit to medium or small sized businesses.
The reported stated that requests for credit cards for small business had increased and that less small business defaults were on the record for the third quarter. Some lenders speculated that the latter was because of better capital management and increased profitability in the small business sector.