By Nina Trentmann

Small and medium-sized British businesses are seeking fewer bank loans, according to a survey released Tuesday by the British Business Bank.

Only 1.7% of smaller businesses sought new loans in 2017, the lowest mumber since 2011. Small and medium-sized enterprises, or SMEs, are less confident that they would get a new bank loan, with confidence declining to 43% in the three months to November, down from 58% in the previous three months.

In contrast, equity financing and peer-to-peer business lending rose substantially.

"Companies are increasingly shopping around when they are in need of financing," said Keith Morgan, chief executive officer of the British Business Bank.

Still, around 70% of surveyed businesses said they would accept a slower growth rate rather than borrow to grow faster. "People are being quite cautious in seeking external finance," Mr. Morgan said.

More than a third of small and medium-sized U.K. companies said they expect accessing finance to become more difficult once Britain leaves the European Union in March 2019.

Write to Nina Trentmann at Nina.Trentmann@wsj.com, Twitter: @Nina_Trentmann)

(END) Dow Jones Newswires

February 20, 2018 09:53 ET (14:53 GMT)

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