Bank lending to SMEs falls in 98 of 120 postcode areas

This much we know. Despite many billions of pounds worth of quantitative easing (QE) cash that’s been handed to the banks, and also more than a few initiatives from the government to stimulate lending to small businesses, it’s still bloody hard to get a penny out of your bank. In 2012, lending to small businesses decreased by £4.5bn compared with the previous year.

SME lending takes several forms and is often an essential tool for good businesses. It could be money for growth and investment in stock or equipment. It can be a useful cashflow buffer. Indeed, a small crisis can be overcome by a loan.

It’s everything from a big cash injection to a relatively modest overdraft. None of it is necessarily a bad thing or an indication of an unhealthy business. But a bit of credit does help the SME world go around.

So it’s quite saddening that despite all the QE and Coalition schemes, that the picture on SME lending seems to be getting worse. And so says the latest data from the British Bankers’ Association (BBA). They’ve just, under duress, released regional data for the period 2011-2012 based on postcodes. In 98 out of 120 postcode areas, bank lending fell over 2012.

The government isn’t satisfied with these numbers and has asked for more detail from the BBA. The current breakdown is made by the first two letters in the postcode, say BN for the Brighton postal district, and as such can cover quite large areas. BN includes Worthing and Lewes, for instance.

By the end of the year we might have a clearer picture of where lending is going on a far more granular level. Threatened with legislation, the two letter breakdown will be improved to BN3 say and BN41 (the difference between Hove and Portslade). It will help us understand the scale of the problem but not solve it.

And isn’t it a bit crap that we don’t know the numbers already?