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Gross lending to SMEs in the first three quarters of 2020 was more than double the annual total for 2019, reaching £54bn, according to data published by UK Finance.

The data, released as part of the quarterly Business Finance Review, shows that the value of lending in the second and third quarters was £36bn, higher than during the same period of 2019, driven by continued uptake of government-backed support.

Nationally, UK lenders have issued 229 Bounce Back Loans Scheme (BBLS) and ten Coronavirus Business Interruption Loan Scheme (CBILS) facilities for every thousand businesses.

Since the extension of government support from November 2020, UK Finance has estimated that £600m of funding has been made available through the topping-up of existing BBLS facilities.

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Approval volumes exceeded 150,000 for construction and retail in the period, and 200,000 for the professional and support services sector. In previous quarters, all industries averaged fewer than 20,000 approvals.

Stephen Pegge, managing director of commercial finance at UK Finance, said: “2020 was a challenging year with the disruption of Covid-19 restrictions and uncertainty ahead of the end of EU transition. The UK’s banking and finance industry continues to support businesses of all sizes across the country to help them trade and invest for recovery.

“Gross lending in the first three quarters of last year was more than double the annual total in 2019, boosted by over 1.5 million businesses borrowing with government-guaranteed facilities totalling over £68bn. SME financing was particularly in demand in the service industries, which were amongst the hardest hit by the pandemic.

“Approvals of overdraft facilities rose significantly at the start of last year but demand in the second and third quarters moved towards loans. SMEs can now ‘top-up’ their Bounce Back Loan to the maximum of £50,000 or 25 per cent of their turnover if lower, with the application deadline for the schemes now running until the end of March 2021. This extension and the wider support of the industry will help businesses access the finance they need as the pandemic continues to affect the economy.”

By Stephen Farrell

Source: Insider Media

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