Are we seeing the death of the business overdraft?

Figures from BRDC Continental’s SME Finance Monitor show that overdraft use in Q3 dropped from 25 per cent in 2011 to 21 per cent in 2012 and 16 per cent in 2013.

According to the Bank of England, overdraft lending to SMEs fell by £800m in December alone, the biggest monthly fall in three years – representing 70 per cent of the total fall in business lending.

And new research by invoice finance provider Platform Black found while 56 per cent of SMEs have had to rely on an overdraft in the last two years, one in five has seen its access to invoices restricted.

Platform Black co-founder Louise Beaumont said: “These awful statistics are compounded by the main high street banks cutting their SME specialists – one of the UK’s main high street banks recently announced that it is cutting almost a quarter (600) of its specialists who advise smaller companies, as it pulls back from supporting the SME market.

“Indeed, I recently spoke to a business owner who said that he has had six business account managers in three years and has only met two of them.”

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