Loans to small and medium businesses (SMEs) in the East of England quadrupled in 2020, a new survey shows.

Banking and financial services trade body UK Finance said lenders approved a massive £5.9bn in loans to SMEs in the region amid the pandemic — or 9.3% of all approved lending across the UK.

That was up from £1.5bn in 2019 and represents a 300% increase. The region’s share represents 8.8% of the total value of approvals UK-wide.

UK Finance’s Business Finance Review — a quarterly publication — shows the number of SME loans and overdrafts approved peaked in the second quarter of 2020 at 142 per thousand businesses across the East of England.

This compares with a regional average over the previous five years of 19 loan approvals per thousand businesses, and shows a “substantial shift” as SMEs responded to lockdowns and changes in customer demand, said the body.

At the end of 2020, deposits across the country were 28% higher than a year ago as firms left cash in reserve to give them a boost as the economy reopens, the review found.

It suggests that government-backed lending schemes and other loan and overdraft facilities have helped SMEs to navigate the uncertainty of the pandemic and develop new products and business models, UK Finance suggested.

Across the UK, gross lending to SMEs stood at £63.6bn in 2020 — 162% higher than in 2019. More than half the value of the loans — £34.5bn — were in the second quarter of the year in the immediate aftermath of the first wave of the pandemic. In the final quarter of the year £9.6bn was approved — which was still 65% higher than the same quarter in 2019.

Stephen Pegge, managing director of Commercial Finance at UK Finance, said: “The enormous disruption faced by SMEs in the past year has been matched with a significant increase in the supply of finance, particularly through government-backed schemes. This lending has provided an important lifeline for businesses to manage cashflow and sustain activity through the successive lockdowns.

“Some SMEs have entered 2021 with financial headroom in the form of increased deposits and flexibility in existing overdraft, invoice and asset-based lending facilities. However, for many businesses, and some specific sectors, there may be extended disruption and financial difficulty ahead. The banking and finance industry will continue to support businesses across the country through these times to help them trade and invest for recovery.”