Credit availability is on the rise, according to the most recent Credit Conditions Survey conducted by the Bank of England. 

Credit availability is on the rise, according to the most recent Credit Conditions Survey conducted by the Bank of England.

The survey of bank and non-bank lenders reveals that in the three months to mid-March credit conditions had improved for corporates and that the availability of funds is expected to recover further in the next quarter.

Lenders cited business leaders eager to gain market share and improved stablility in the capital markets as factors contributing to an increase in bank loans to the corporate sector. However, while availability had improved, the findings also found that maximum credit lines had fallen, collateral requirements had increased slightly and that loan covenants had tightened.

Commenting on the findings, Paddy MccGwire of Cobalt Corporate Finance said: “Banks are twitchy and they are looking at the slightest hint at a breach of covenant and coming down hard.”

Adds MccGwire: “The most important thing is to maintain dialogue with lenders. If you mismanage the information flow to the bank, it does you no favours.”