Small businesses had much easier access to credit in the third quarter of this year, according to figures from the Bank of England.
From the survey of UK lenders, the Bank suggested that restrictions on borrowing are doing less to hamper companies than first thought. The survey showed more lenders reporting increased access to credit than a decline, giving a balance of 27 per cent, up from a balance of 13 per cent in second quarter, and minus 1 per cent in the first quarter.
Economists predict that this improvement in access will go a long way to ease fears that smaller companies have been frozen out of the borrowing markets.
While access has become easier, however, the demand for it still shows that businesses are excercising great caution, amid continued economic uncertainty. The Bank reported, "The uncertain economic environment was constraining investment-related demand for new lending."
The Bank of England's head of markets, Paul Fisher, said there were positive signs on what remained, however, there was also likely to be a long road to recovery. He added, "It is clear that the lending capacity of the banking system, in the UK and elsewhere, is impaired and will take some years yet to recover. Some banks need to continue de-risking and deleveraging."