The Bank of England has reported that in the third quarter of 2013, 21 participants made Funding for Lending scheme (FLS) drawdowns of £5.5bn.
This took the total amount of outstanding drawings to £23.1bn, with 33 groups now benefitting from funding under the scheme. One additional group joined the scheme in 2013 Q3, taking the total number of participating groups to 42.
Net lending by FLS participants was +£5.8bn over the quarter. This compares to lending of +£1.6bn in Q2, and is the biggest quarterly net lending flow since the FLS was launched, reflecting previous improvements in credit conditions beginning to feed through to loan volumes, the Bank said.
Cumulative net lending since June 2012 by FLS participants has now become positive at +£3.6bn, an increase of 0.3% relative to the stock of loans as at June 2012.
Karen Bennett, sales and marketing director, commercial mortgages, Shawbrook Bank, said: “Small business finance is a real issue in the UK and any scheme to encourage more lending is welcome. However, looking at today’s figures, it’s clear that the smaller banks are leading the way.
“Over the last year, lending from the smaller banks has increased by nearly £8.5bn, but lending from the big high street banks has gone down by just under £5bn. We hope to see this change and the whole industry getting behind small businesses – which is particularly important to help fuel the UK’s economic recovery.
“We drew down from the scheme in Q3, this has enabled us to further boost the lending we’re already doing. We recently announcement that we had exceeded £1bn in loans, 75% of which went to small businesses. Our appetite to lend and help more clients to grow their businesses is as strong as ever and we are determined to keep demonstrating this appetite in facts and figures.”
