Lending to businesses (Tables F-I)
UK businesses repaid £3.8 billion of finance from UK banks (in the form of loans) and financial markets (in the form of bonds, equity and commercial paper) in February. Bond markets (a longer-term form of borrowing from financial markets) was the main driver where there were net redemptions of £3.1 billion though, within this, there was a small increase in gross issuance, following little activity in recent months.
Bank lending to large businesses increased by £1.1 billion in February, but was below the recent average of £2.0 billion. In contrast, lending to small and medium sized businesses (SMEs) fell slightly by £0.1 billion. These weaker flows have resulted in the growth rates for business lending falling for both large businesses and SMEs, to 5.6% and 0.2% respectively (Chart 2).
Chart 2: Bank lending to businesses growth