Banks lent £18.8bn to small and medium enterprises in the third quarter of this year but 57% of builders still experiencing problems with credit
Builders are still having grave difficulty securing finance despite government figures reporting lending to small and medium businesses is rising.
The government reported last week that Project Merlin, its plan to get banks lending to small businesses, had resulted in a total of £18.8bn being lent to small and medium enterprises in the third quarter of this year. This brings banks up just £0.9bn short of the target for the first nine months of this year at £56.1bn over the period.
However, a survey by the Federation of Master Builders has revealed that 57% of small and medium builders had adverse changes to their credit facilities in the last 12 months. Plus, nearly 40% of small firms had seen their charges increased by their bank.
“The behaviour of the banks is completely unacceptable and is holding back delivery of growth and jobs,” said Brian Berry, director of external affairs at the FMB.
“Nearly 58% of survey respondents told us they had been unable to implement growth or investment plans because they had been unable to raise the necessary funds from the bank, and nearly 49% of respondents told us that they had been unable to implement expansion plans that would have created new jobs,” he added.
The FMB said small firms needed to be able to approach their banks for reasonable loans so the sector could recover from the financial crisis.