Credit crunch ''having limited impact'' on small firms - commercial mortgages

20 December 2007

The British Bankers'' Association (BBA) has said that the latest data shows that smaller firms with commercial mortgages are holding up well in the face of global liquidity problems.

According to the BBA, term lending rose nine per cent in the 12 months to September and now stands at £39.9 billion, though overdraft borrowing fell by one per cent as businesses moved away from relying on "temporary, cash flow finance".

On top of this deposits rose by eight per cent over the same period, totalling £48.8 billion.

"The third quarter data show little, if any, sign of small businesses being affected by the credit crunch at that stage, either from the supply or demand side, as term lending rose by double the average quarterly rise and deposit levels were being maintained," confirmed BBA director of statistics David Dooks.

Earlier this week it was suggested that smaller firms must pay attention to the hidden cost of the Christmas period when budgeting for the year.