Lending to small businesses dries up as outlook darkens – survey

LONDON (Reuters) – Lending to small businesses in Britain has fallen to its lowest since at least 2014 as companies and banks worry about the worsening economic outlook, according to a survey published on Monday.

Only 9% of small firms sought finance in the first three months of this year, the lowest proportion since the Federation of Small Business began asking the question eight years ago.

The share of firms that saw their applications approved was also at a record low of 43%, the FSB said.

“Lenders pulling up the drawbridge for small firms will threaten our already faltering economic recovery,” FSB National Chair Martin McTague said.  

The FSB surveyed 1,211 small business owners and sole traders in March and April.

Earlier this month, the Bank of England warned of a sharp economic slowdown and possibly a recession with inflation set to peak above 10% later this year.

(Writing by William Schomberg; editing by Jonathan Oatis)