Small businesses are finding it more difficult to get access to finance, new research has found.
A survey carried out by the Forum for Private Business (FPB) has revealed that the number of loans and overdrafts businesses have been able to use has gone down. Just 1% of respondents said access to finance has improved, whereas 15% said it has worsened. This contrasts to the 4% who claimed the same in May.
Business Secretary Vince Cable has attacked banks for ‘misleading’ small firms by saying that though demand for lending is low, approval rates are high. Britain’s banks must do a lot more to help small firms, said Cable at the launch of a green paper entitled ‘Financing a Private Sector Recovery'.
According to the FPB, there is ‘significant latent demand' that is not being met by banks.
The FPB’s Head of Policy, Matt Goodman, said: "Contrary to what some of the banks are saying, some firms are still not able to access the finance they need and both business growth and economic recovery is under threat as a result."
He added: "According to our members, demand is certainly there but lenders are not providing the funding or the levels of service that they should be. They are telling us that creeping costs and charges are making finance that is available less accessible."