Banking relationship breakdown
Mar 18 2010
Bank of England figures reveal business lending to be at an all-time low
A large proportion of businesses do not know why they are turned down for bank funding.
According to financial services firm Bibby, 20 per cent of businesses are left in the dark about their bank’s decision to refuse a loan.
Edward Rimmer, chief executive at Bibby, says: ‘Access to finance continues to be a real issue for small businesses, with many falling short of strict lending criteria, yet small business owners have a right to gain access to the rationale behind a lender’s assessment.’
Some 64 per cent of those surveyed say it has become more difficult to secure bank funding than a few years ago.
The findings come as the latest figures from the Bank of England show that lending to businesses was down by £6.5 billion in January compared to the same month last year, falling to the lowest amount since records began.
Philip White, chief executive of finance provider Syscap, says: ‘Many profitable SMEs are not daring to invest properly in their own businesses. Not only does this hinder the economy’s recovery in the short-term, but in the longer term a low level of investment in business assets will undermine the UK’s international competitiveness.’
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