Business lending at highest level since 2009
Net lending to UK businesses rose by £2.5 billion in the month to September - the biggest monthly rise in lending since January 2009 - figures from the British Banking Association (BBA) have shown.
Increased demand from wholesalers, retailers and utility companies helped to boost net lending, as business confidence continues to grow.
Key figures from the BBA and the Bank of England's Summary of Business Conditions also show that:
* Gross lending to small and medium-sized enterprises (SMEs) increased in four out of the last five months
* New lending to SMEs was £10.5 billion in the three months to September - up 11 per cent on the same quarter last year
* The cost of finance for SMEs is falling, with 32 per cent of SMEs being offered interest rates of less than four per cent and over a quarter being offered rates between four per cent and 4.99 per cent.
However, SMEs are still showing caution about seeking and using finance - £15.3 billion of agreed bank finance is currently unused.
BBA research shows that SMEs are sitting on record cash reserves of over £130 billion and that they repaid £1 billion more than they borrowed in Q4 2012.
The BBA's chief economist, Richard Woolhouse, said: "This report confirms that banks are supporting the recovery by providing businesses with the finance they need. Crucially, demand for credit from companies across the UK is increasing."
"New BBA figures show the biggest monthly increase in net business borrowing since 2009, and the Bank of England has also reported double digit increases in new lending to SMEs."
"Borrowing costs for businesses continue to fall, in part due to the Funding for Lending scheme. There has seldom been a better time for companies to apply to their bank for credit."
Source - Gibson Hewitt