It read: “Lenders expect to make credit more easily available to households and businesses in the first quarter of 2010, according to a survey by the Bank of England.” The Bank’s quarterly credit conditions survey also showed that lenders expect to narrow spreads on both corporate and mortgage lending in the coming months. Credit availability was expected to improve further in the first quarter of 2010 for corporates and for secured lending to households and to stabilise for household unsecured credit. Well, I don’t know about you, but that sounded like a cheery bit of news to beat off the frosty effects of the winter blues. The last year has been torrid for SMEs in the UK. There is hardly a business owner that has not had to grapple with some fall-out from the global financial meltdown. As businesses up and down the country struggled with reduced order books, slow paying customers and unyielding customer relationship managers at the banks, the news became bleaker. Green shoots in May had become withered stems by October. But maybe, just maybe, things have started to turn. The government is, for better or for worse, committed to keeping the economy from sliding into a Japanese-style deflationary slump and is pumping money into the economy faster than you can say "beware a bout of hyper-inflation". In adopting this policy, it is helping support pretty much all asset classes, not least the stock market, and at the same time keeping general interest rates much, much lower than they should be. With no end to this support in sight, it encourages all players in the market to take a little more risk, and this includes the lenders who provide the vital liquidity to SMEs. It is a classic "pump priming" strategy that may or may not work in the long term. However, the long term is for others to worry about right now. For the majority of small business owners the fact that lenders feel somewhat more confident in the economic environment to start lending is nothing but good news. Neil Greenaway is the MD of Clifton Asset Management. Related articles:SMEs being hit by stealth chargesLast ditch talks for £1bn small biz fund
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