Consumer and Business Credit update

3rd of March, 2011 Bookmark and Share
To the relief of the producers of Top Gear the only area of consumer credit that expanded last year was asset finance in the form of the car finance market. Figures from the Finance & Leasing Association (FLA) show that credit card spending fell by 7% in 2010, while the value of unsecured loans approved by lenders dropped by almost a quarter (24%). Spending on store cards also fell last year, with shoppers reducing their use of the products by 7% compared with 2009. Without the positive figures in the car finance market, consumer credit would have fallen by 10% during 2010.

We have recently seen Bankers get their bonuses, have been taxed more, and small business may get some more lending. This has caused Vince Cable, business secretary, to proclaim that the banks’ promise of £10bn for self employed finance "a good step forward", but Britain’s entrepreneurs and Labour took a more sceptical view. Small business owners say the high prices charged for credit and the bureaucracy involved are the principal reasons they are not borrowing more - rather than a lack of offers. A survey of members by the Federation of Small Businesses found that 84 per cent had not asked their bank for credit, either because they had already been refused or because it was too expensive.
Rob Killeen, Capital Fortune, Award Winning Mortgage Broker