SME borrowing set to rise in 2017
SME borrowing is projected to rise 22% in 2017, according to Zurich.
The survey of 1,000 SME owners showed that firms are planning to borrow an average of £41,770.
This would see lending to SMEs rise to over £50 billion in 2017.
Anne Griffiths, head of SME proposition at Zurich, said:
“Borrowing can often be indicative of confidence, and increased investment in talent, equipment and business premises for growth may be one of the most encouraging indicators of all.”
How are businesses borrowing?
38% plan to borrow £100,000 or more, while 25% plan to borrow more than £250,000.
Of the businesses that took out a loan in 2016:
- 12% took it out against their own commercial premises
- 9% took it out against their business equipment
- 12% secured the loan against their own residential property
- 5% used collateral belonging to friends and family
- 27% did not know the source of their security.
Many of the respondents did not plan to borrow at all:
- 65% did not borrow anything in 2016
- 64% do not plan to borrow anything in 2017
- 55% have not taken out a loan in the last decade.
Anne Griffiths said:
“The business landscape appears rife with uncertainty, but SMEs have long been the building blocks of this economy and as long as they are building themselves sensibly, sustainably, with contingencies in place, then the UK can be confident in the health of its economy.”
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