Net lending to non-financial businesses in December contracted by £0.6bn reducing the stock of outstanding business loans to £280.7bn at the end of 2013.
But despite net lending landing in negative territory at the end of last year the fall back in net lending was less severe than December 2012 when it stood at to -£3bn.
Rob Jupp, chief executive of bridging and specialist loan distributor Brightstar Financial, said: “High street banks have started to lend and challenger banks have seriously contributed to business banking but we still have an absolute undersupply of business banking available to SMEs in the UK.”
Duncan Kreeger, director of West One Loans, said: “To build a sustainable recovery the UK still needs to provide more homes and offices in the right place and help firms make the right investments to create more job and this morning’s figures are still a long way off that.”
Kreeger said high street loans for vital construction and development projects fell by 10% over the course of 2013 at a time when the potential returns from such projects have increased rapidly.
He added: “When opportunities are growing speed is of the essence and by most measures our wounded high street banks are still hobbling.”
