Monday, 7 September 2015

"At last! British banks are FINALLY lending to small businesses"

From The Daily Mail:

According to Bank of England figures, small and medium-sized businesses received over £1.1billion in net lending from January to the end of June.

Net lending is the amount handed out to firms, minus the amount repaid.

Ho hum. How many small and medium-sized businesses are there? Half a million? That means on average £2,000 each.

From The Council of Mortgage Lenders:

Lending was particularly subdued at the beginning of the year, and was running at lower than expected levels. But in the second quarter it began to gain momentum. Our recently revised forecast predicts gross mortgage lending in 2015 will be £209 billion.

So for every £1 the banks lend to SMEs, they lend £99 to mortgage borrowers.

UPDATE: BFOD points out in the comments that the figures are not necessarily comparable because the former is net lending and the latter is gross lending. But if you look at a breakdown of total UK bank lending, it's about 80% residential mortgages, 10% commercial mortgages and the other 10% is split between credit cards, personal loans and proper SME lending (most of who are tenants).


Lola said...

Rent seeking alive and well then?

Lola said...

And, lending for consumption rather than production at a ratio of 99 : 1

(Shakes head)

Brian, follower of Deornoth said...

£1.1billion in net lending

gross mortgage lending in 2015 will be £209 billion

Ralph Musgrave said...

I'm quite happy to let market forces rip in this area. I.e. if banks think mortgagors are much better bets then SMEs, that's OK by me. SMEs actually fail to repay loans twice as often as mortgagors.

Random said...

RM, WTF is "market forces"?
Ban useless lending. If market forces think shuffling aluminium between warehouses is productive, too bad.

Steven_L said...
This comment has been removed by the author.
Bayard said...

R, you're quite into banning and regulating things. Have you thought that most things actually work better when not regulated and do you have an answer to the question "Quis custodiet custodies ipses?"

AFAIAC, if someone or some organisation is stupid enough to lend money to a company that simply shuffles aluminium between warehouses, then that's their business, nor should anyone else be expected to take the hit if it all goes down the tubes.