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Credit conditions for SMEs Q2 2024

ended 11. July 2024

On Thursday at 09:30 the Bank of England is publishing its Q2 Credit Conditions survey, which will cover demand for finance from SMEs, how supply shaped up during the second quarter of the year and broader pricing and default trends. Ahead of this, a few Qs:

  • How was demand for finance from SMEs in Q2 in your experience? Also did demand drop off once the election was announced in June, rise or stay the same?
  • How is the supply of finance at present for SMEs? In short, are lenders willing to lend and which lenders are most active (high street, specialist, etc)?
  • Are commercial finance rates likely to drop if the Bank of England cuts rates on 1 August?
  • What are the main reasons SMEs are taking out finance at present, e.g. grow, to bolster cashflow, etc?
  • Are businesses in any particular sector more active at present?
  • Have you seen more businesses defaulting on commercial loans/mortgages in H1 2024?

Any other trends you're seeing, send them across. 

2 responses from the Newspage community

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Ben Perks
Managing Director at Orchard Financial Advisers
It’s been a testing time for small businesses. Many are busy beavering away, but are left with very little profit to show for it.
The cost of trading has never been higher and so too is the use of credit to get through.
I expect that on Thursday, once again, we will see higher borrowing figures. Sadly, this won’t be caused by ambitious business people rapidly expanding, it’ll be to plug holes and bide time.
Rachel Reeves has her work cut out to improve the conditions for SMEs.
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Ian Hepworth
Director at Funding Solutions UK Limited
We have seen an increase in demand for working capital facilities to fuel growth. There seem to be a lot of good news stories for SMEs experiencing rapid growth, winning new contracts, bringing on board new customers and launching new products. The demand for the likes of invoice finance, trade finance and supplier finance seems to be increasing as businesses need working capital to fuel this growth.

I also think a lot of businesses are putting off finance decisions in the hope that a reduction in the base rate will make it more affordable. Many business finance facilities are priced as a margin over the BoE base rate so any cut represents a direct benefit.