Since the onset o the global financial crisis small and medium sized businesses have really struggled to get access to finance from banks, and this has caused a great deal of concern amongst many officials, including the government, with regards to how the economy can improve if businesses are not able to get the finance that they need.
It has been suggested in the past that the reason behind lower lending levels to businesses was a mixture of lending restrictions on the part of banks and weak demand from businesses, which were said to be wary about taking on finance in the current financial climate. However, one group of industry officials has said that weak demand is not the reason behind the low levels of lending to businesses, and that this is largely down to banks.
The claim was made by members of the Telegraph’s group for owner-managers, who have claimed that amongst banking frontline staff there have been inconsistent lending decisions, more security demands, higher charges on overdraft facilities, and a general lack of knowledge when it comes to business lending.
The owner of an estate agency said: “I almost believe them when they say there is no demand but it probably has a lot to do with the terms they want to lend on.”
Another business official explained how her business loan request was handled, stating: “It all started out well, with ‘can’t see it will be a problem’ kind of statements, which slowly deteriorated to silence; then not bothering to return my calls; to a ‘no’ decision; to treating me like something that had dropped off the end of their shoe. And absolutely no explanation of why or how their position had changed.”
Tags: buainess, finance, Bank, loan, Business_Finance