Gross lending to SMEs was higher than £5.1bn in the second quarter of 2022, according to data from UK Finance.
In its new Business Finance Review, it also reported that demand for overdraft facilities remained stable despite its rise in the previous three months.
Additionally, the quarter saw a continued rise in advances through invoice finance and asset-based lending – with total lending now mostly returned to pre-pandemic levels.
Stephen Pegge, managing director of commercial finance, said: “The availability of finance remains consistent, and repayments continue steadily to reduce total outstanding borrowings from their peaks last year.
“SMEs appear to be focused on managing cashflow challenges, with overdraft demand stable and invoice finance advances rising significantly over the past year as more clients are starting to use this form of finance again.”
Furthermore, the level of SME deposits was stable in the quarter, and the value of SME repayments has been steady at £8.4bn for the past three quarters.
However, despite these relatively positive findings, Pegge still urged caution in the face of the ongoing economic crisis: “New lending to SMEs remained stable in the first half of this year but looking ahead there are signs of a slight reduction in demand for finance.
“Increased costs, including rising energy prices, means businesses have been cautious about committing to longer-term investments.”
