Small business borrowing (Bank of England)

Are banks becoming more cautious about lending to SMEs? I believe banks are extremely cautious with SME's, but nothing has really changed there, right? More caution is being applied depending on the industry - hospitality, for example, is still an 'at risk' sector, with Government guidelines being unfairly placed upon the industry and timelines for release of restrictions always vague and non committing. This adds additional risk for banks. Is demand for loans among SMEs still high, or has it dropped off? I believe demand is still high and will continue to be high as long as banks take the opportunity with the Government-backed schemes to support SME's in refinancing their business and therefore allowing them to create financial capacity for the growth opportunity available to quick-moving, innovative businesses. With lots of talk about 'recovery, the banks must have confidence in the schemes available and 'the powers that be' must are strongly encourage the use of these facilities. What are the most common reasons SMEs are borrowing, e.g. to grow or shore up their finances? At BEAR, we are excited to begin looking at the financing opportunities with our banking partner to further secure our position and be ready for growth. Like many more SME's in the UK, I believe there will be varying reasons why a business will borrow. There will undoubtedly be the obvious reason that the rates on debt are lower than some of their historic debt. The requirements for personal guarantees from directors will be less when using the recovery loan scheme, which is a huge burden for owner-managed businesses. Still, the reason will be to reposition themselves to be agile and have the ability to maximise opportunity.