Hell to pay
“Need a loan? Easy – just agree to put down a hefty whack of collateral, pay the exorbitant interest rates and meet the gobsmacking bank charges. Then sign here … (preferably in blood) … and watch your business grind to a halt.”
In 2011, Building reported on SMEs’ battles to gain credit – it might strike a chord with businesses facing slowing investment in this week’s piece on financing. Building compared getting a bank loan to making a pact with the devil.
Read: Access to finance: The banks that like to say ‘no’
“You can still find funding out there, but the conditions are much more onerous than they ever have been. They have the potential to be extremely damaging,” said Michael Quickfall of Quickfall Builders.
“I know of one SME that went to the bank looking for a £60,000 loan and the bank said ‘yes, but only if you and your business partner put up £30,000 collateral each’,” said Suzannah Nichol, then-chief executive of the National Specialist Contractors’ Council.
Chancellor George Osborne said his plan to help SMEs by credit easing would “provide a real boost to British business”. SMEs were a little sceptical, suggesting that a second “devil” – that of detail – needed to be clarified before any change would take place.
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