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‘Banks lending less,’ say small retailers

Jul 31 2009

Cash-strapped small business retailers are still being denied finance, with a third saying lending has decreased over the last three months.

According to the British Retail Consortium (BRC), over two-thirds of the respondents reporting a decrease in lending said lack of finance has undermined their ability to trade. Of these, 60 per cent say they have had to reduce staff levels.

Jane Milne, business environment director at the BRC, says: ‘As the government launches its employment schemes, it's outrageous that some retailers are being forced to let staff go because of a lack of affordable credit.’

She adds: ‘We understand the banks' current cautious approach to lending, but there's no reason why they need to stop loans to fundamentally sound businesses.’

Despite interest rates pegged at 0.5 per since March, 44 per cent said the cost of lending has risen over the last three months.

Last week Chancellor Alistair Darling met with the UK’s largest banks to urge them to increase SME lending.

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