Firms finding it easier to obtain new credit for the first time this year, despite 50% reporting a rise in finance costs and the continuing struggle for trade credit insurance.
A survey published today by the Confederation of British Industry (CBI), revealed that 27% of UK businesses that sought new lines of credit in the past three months said that availability had improved.

10% of respondents said that loan availability had worsened, however, the BRC stated that the rounded balance of 18% still stands in contrast to May's figure of -20%. It is also the first improvement in credit supply since the BRC's survey began in January 2009.

However, the Access to Finance Survey also highlighted that the cost of finance has continued to rise, with half of firms experiencing an increased in the past three months and 21% reporting a rise of more than 100 basis points.

Large firms with more than 5,000 employees saw a particularly strong rise in new credit availability over the three-month period, after experiencing much more difficult credit access earlier in the year.

The survey also revealed that the supply of existing credit was "broadly flat", with a balance of 2% reporting better availability, compared with -10% in May. However, it was revealed that small and medium sized enterprises saw a moderate decline in the availability of existing credit lines.

CBI director general Richard Lamberty said: "Credit availability has been getting more difficult for many months, so today's results are positive news. The improvement in access to new credit will help many businesses struggling with the recession, and it is encouraging that its supply is expected to improve in the months ahead."

He added: "Smaller and medium sized businesses are still facing challenging credit conditions and have fewer funding options open to them than big companies. We hope over time their credit supply will improve. It is unclear when bank lending will be flowing feely again, but for many firms, credit conditions are at least moving in the right direction."

Mr Lamberty also highlighted the issue of trade credit insurance, stating that it had become a "pressing concern for many businesses". He explained that firms are still struggling to obtain trade credit insurance, despite the government's extension of the top-up scheme, and that firms "need to try and reduce their reliance on it."