Challenger bank CYBG ups lending to UK’s SMEs


Owner of Clydesdale and Yorkshire Banks, announces that it has lent over £2.1bn to the UK’s SMEs as part of the bank’s commitment to help fuel SME growth by lending small firms £6bn in the three years to 2019. 

The bank’s lending commitments have been achieved or increased in all the UK’s regions against targets for 2017, ranging from £100m to £400m. Lending in the Midlands increased to over £141m, 41% above the Bank’s £100m commitment for 2017. The bank’s SME business is focused on firms based across the UK’s regions, with over 90% of SME lending focused on the UK regions outside of London. 

The success of CYBG’s lending to SMEs comes despite the bank’s quarterly SME Health Check Index recording the worst business health reading for the UK SME market since 2014, as a dip in confidence and a lack of borrowing take their toll. The Index dropped to a score of 42.02, the fifth consecutive quarterly fall. This suggests a worsening business and macroeconomic environment since the EU Referendum in June 2016 and the ongoing Brexit negotiations. 

SMEs’ lack of confidence and their reduced borrowing appetite are key drivers behind the Index fall, with lending down 3.7% to £92.5bn to Q3 2017), bank lending to SMEs fell by £1.9bn, or 2%. Encouragingly, UK Finance data published at the end of February shows that lending to SMEs has stabilised in the final quarter of 2017, but firms delaying investment decisions remains a concern.

In recent research conducted by the bank, SMEs were specifically asked about the “main barriers” to scaling up their businesses - over a fifth (22%) of SMEs cited access to finance as barrier. Against this backdrop, CYBG is delighted to be lending more to the UK’s SMEs, who represent 5.7 million enterprises, or 99.9% of total businesses in the private sector with a combined turnover of £1.9tn. 

The research also finds that among SMEs who would like to borrow an average amount of £91k each over the next six to 12 months, almost a half (47%) want to use that money to hire new staff and a third (33%) wish to plough it into their working capital. Interestingly, 28% of SMEs plan to make acquisitions with the help of the money they borrow. 

Commenting on the successful lending, David Duffy, chief executive, CYBG, said: 

“We all know SMEs feel it’s more difficult to get access to finance these days and in the current economic environment, small firms are long overdue a confidence boost. 

“I’m delighted we have more than matched the first year of our commitment to lend SMEs £6bn over three years, with well over £2bn distributed to them across the UK in 2017 alone. 

“As the UK’s leading SME challenger bank and a regional economic champion, I’m especially pleased we have met or surpassed all our regional commitments in the Midlands, North of England and Scotland. Through this programme, CYBG will continue to support the innovation, creativity and growth plans of the nation’s small and medium sized enterprises.”