According to the report, Q4 of last year saw £3.5bn lent to SMEs, unchanged from the previous quarter, as well as an increase in loan volumes and overdraft approvals, despite 2023 being the third consecutive year of decline in gross lending.
UK Finance said this showed early signs of returning business confidence, with lenders meeting the increased demands — the report also said that 59% of SME lending now came from outside of big banks.
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New loans increased by 3% from Q3, while approved overdrafts rose by 7%, with medium size businesses seeing the value of approved overdrafts rising by nearly a fifth and loan approval values rising by 17%.
David Raw, managing director of commercial finance at UK Finance, said: “2023 was another challenging year for SMEs as they continued to face uncertain demand and rising borrowing costs.
“There were promising signs that demand for new finance may be turning a corner in the final quarter of 2023 — approvals for new loans and overdrafts increased and the rise was broad-based across all sectors — this could be a sign that confidence is gradually improving.”
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