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Businesses ‘beginning to borrow again from banks’, says BBA

LloydsBank lending to businesses is beginning to grow, according to new data that suggests the post-crash squeeze is over.

Figures from the Bank of England show that borrowing by businesses has been positive in two of the last three months and that lending has improved across a number of sectors, particularly in the property market which has been actively reducing its exposure to bank lending.

Companies’ net borrowing rose in March with contributions from wholesale and retail trade (+£1.1 billion), transport, storage and communication (+£500 million) and manufacturing (+£400m).

Richard Woolhouse, chief economist at the British Bankers Association, said: “We’re starting to see signs that businesses from many sectors are starting to borrow more from their bank.

“While it’s still too early to predict, these figures and the latest data from the Bank of England suggest that business borrowing has turned a corner.”

A slowdown in bank lending to businesses was blamed for many companies being starved of the capital they need to grow, or even to continue trading.

It gave rise to alternative sources of finance such as equity raising, crowdfunding and invoice factoring.

Other figures from the BBA today show:

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