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Bank lending to small firms in Telford falls by £132 million in five years – but Shropshire sees rise by £38m

By Lisa O'Brien | North Shropshire | Business | Published:

High street banks have increased lending to small businesses in Shropshire over the past five years – but funding has fallen in Telford and Wrekin, new research shows.

Analysis of postcode lending data shows that funding to small businesses by the main high street banks in Shropshire rose by 4.2 per cent from 2014 to 2018 – a total of £38 million.

But in Telford & Wrekin it fell by 44.5 per cent – £132 million.

The majority of the West Midlands saw an average reduction in lending of 10 per cent.

Eleven out of 14 local authorities in the region saw a drop in small and medium-sized enterprise (SME) lending, totalling £858m over five years.

Birmingham saw the largest fall at £306 million, followed by Staffordshire at £103 million and Telford and Wrekin with £132 million.

SMEs in Herefordshire received the largest boost in lending in the region of 11.2 per cent – a total of £76 million.

Lending across the West Midlands fell by 10 per cent, the fifth biggest reduction out of all regions in Great Britain.

Official statistics show that the business count in Shropshire rose by eight per cent from 2014 to 2018 – the third lowest increase in the region and below the average of 14.5 per cent.

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In Telford & Wrekin, despite lending reducing the business count rose by 11.2 per cent.

Mission

The research was carried out by iwoca, one of Europe’s largest business lenders, which has also increased the levels of finance made available to businesses in Shropshire.

In the past three years iwoca has approved £7.9 million of funding for small businesses in Shropshire, increasing the level of finance from £1.7 million in 2016 to £4.3 million in 2018.

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Christoph Rieche, CEO and cofounder of iwoca said: "SMEs are vital for the health of the economy.

"Our mission is to give business owners the funding they need so that they can do what they love, and by doing so, creating jobs and supporting communities right across the country.

"It’s therefore concerning that in many parts of the country, major banks aren’t serving small and microbusinesses with the funding required to help them thrive.

"That’s why at iwoca we’re focused on giving small business owners access to the finance they need to drive our economy forward."

Over the same time period which saw a 4.2 per cent rise in SME lending, Shropshire had the second lowest proportion of households where no adult was in employment –12.8 per cent – and was joint with Worcestershire.

The figure for Telford & Wrekin was 15.5 per cent.

Data from the Office for National Statistics show that across the West Midlands, the average figure was 16.9 per cent.

Lisa O'Brien

By Lisa O'Brien
Senior Reporter - @lisaobrien_Star

Senior reporter based at Shropshire Star's head office in Ketley. Covering the Telford area.

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