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Commercial Finance

Banks tighten lending to SME retailers

New figures from accountancy firm Moore have revealed that lending to SME retailers has fallen from £15.6bn to £14.7bn since 2016, with banks showing greater reluctance to hand out loans amid uncertainty over Brexit. Over the same period that lending to SME retailers decreased, lending to large retailers by banks jumped by 20% from £31.5bn to £37.8bn. Bridget Culverwell, director at Moore, said: “It is a real worry for smaller retailers if banks are treating them less favourably than larger retailers. With the final outcome of Brexit still uncertain, it is expected that banks will continue to be apprehensive to lend to the sector in the months ahead.” – City AM

Steep rise in small companies blaming uncertainty for lack of growth

The number of small businesses that see market uncertainty as a hindrance to their business has increased by 26% over the last six months. A study by Hitachi Capital Business Finance found 75% were being held back by factors that were outside of their control, with market uncertainty now affecting three in five. Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said: “With the upcoming General Election, it seems highly unlikely that there will be a clear position on government policy or Brexit until after the Christmas break. For many small businesses, this will mean planning for a New Year with lots of unknowns as market factors.” – Asset Finance International

Industry & Legislative News

Credit schemes prompt regulation call

The Times reports that a number of retailers have “ramped up profits” by selling expensive credit, with some high street stores offering credit schemes that charge up to 30% interest. Research by the Financial Conduct Authority shows that one in three shoppers who take on such deals fail to repay on time, leaving them facing fees and interest charges. Baroness Altmann has called for tougher regulation of consumer credit, saying that retailers are “operating just as a bank would and therefore should be subject to the same rules as a bank.” “It’s time for the regulator to say everybody needs to meet better standards if they are offering retail credit,” she added. – The Times

NACFB Attendees raise £24,388 for CLIC Sargent at 2019 Gala Dinner

Attendees at last week’s NACFB Gala Dinner and Industry Awards raised an incredible total of £24,388 towards the Association’s charity of the of the year, CLIC Sargent. The amount makes a considerable contribution towards the target of £30,000 in 2019/20. The NACFB Thanked everyone who gave so generously on the evening. CLIC Sargent is the UK’s leading cancer charity for children, young people and their families. Its care teams provide specialist support across the UK. You can find out more about the NACFB’s chosen charity, and donate directly, via their JustGiving page . – NACFB & CLIC Sargent

Boris Johnson backs looser state aid rules after Brexit

Boris Johnson said on Friday that the UK will break free of EU state aid rules after Brexit making it “faster and easier” for a government to intervene in failing industries. The PM added he would “fundamentally change” public procurement rules to “back British business”. “I believe in competition, I believe in a level playing field, but we need to speed things up,” he said at a press conference. “There are ways we would be able to do things differently and better.” However, the Institute of Directors said the PM’s proposals “suggest a retreat away from free and open markets” and would have “clear implications” for the UK’s ability to negotiate a post-Brexit trade deal with the EU. – Financial Times

Buy-to-let repossessions soar

Figures from UK Finance show the number of rental properties being repossessed by lenders because the owners are too far in arrears on their buy-to-let mortgage has risen by 40% compared with last year. Some 4,550 buy-to-let mortgages were in arrears of 2.5% or more of the total borrowing in the third quarter of this year. Of those more than a thousand are in serious arrears of 10% or more. UK Finance argues that part of the surge is from a backlog of cases being resolved at the same time, but landlords warn that this is a sign of things to come. “While these figures are shocking, they’re hardly surprising considering the volatile environment in which landlords run their businesses,” warns Meera Chindooroy, policy and public affairs manager for the National Landlords Association. – The Independent

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