The original UK SME credit indices

On 19 September 2014 Charles Thorburn published the former CreditSquare’s first UK SME credit release. Founder Björn Lindvall described the results separately three days later. The two readings distinguished businesses’ appetite for borrowing from the willingness of lenders to offer credit. A single figure for bank lending could hide a change on either side.

The first C2C release

Fifty was the dividing line on both indices. Values above 50 signalled an increase and values below 50 a decrease. Both sides expanded during the quarter, with the supply score further above neutral. A score of 86.1 does not mean that 86.1 per cent of loan applications succeeded.

Credit demand

Demand captured changes in businesses’ appetite for credit. Borrowers could postpone an application, accept less funding or pursue a new project. Lender and borrower surveys offered different perspectives on those choices.

Credit supply

Supply addressed changes on the other side of the transaction. The index combined reported lending conditions and quantitative data. Its June value described the direction of change relative to the previous quarter.

The next release put demand at 60.7 and supply at 66.0. The firm later changed both the measures and their names. Its 2015 series followed activity and availability. For official lending balances and their units, see the UK SME credit monitor.