Business lending falls

Business lending dropped for the third consecutive quarter, according to an industry report.

Business lending fell in the final quarter of 2009 according to a Bank of England report.

Funding business accounts through credit remained difficult with the continuing weakness of syndicated lending at the end of the year.

Commercial real estate was the economy sector to fair best with lending comparable to the previous year, but most economy sectors saw lending fall.

It was the third consecutive quarter that net lending to companies had fallen, although "better quality" firms may have been afforded downwards pressure on loan pricing from major lenders.

The report also revealed loans from foreign lenders may have been easier to secure, but overall demand for new corporate borrowing remained weak.

Earlier this week, Vince Cable, the treasury spokesperson for the Liberal Democrats, had indicated that he felt banks needed to do more to give small firms access to competitively-priced business bank accounts.

By Joe Letts