British Retail Consortium Calls On Banks To Offer More Loans
It would appear that although the major high street banks in the UK are claiming that they are increasing the number and amount of new loans to small and medium sized businesses, they seem to be the only ones who believe that is the case, as an increasing amount of pressure is being placed on the banking sector, from various sources, to increase the amount of cheap loans they offer to their business customers.
The British Retail Consortium (BRC) is the latest organisation to call on banks to do more for businesses, as their Credit Conditions Monitor has revealed that around one third of small and medium sized (SME) retailers and around 20 per cent of large retailers have experienced a reduction in business loans being offered by banks.
The BRC has also revealed that the lack of business loans has affected more than two thirds of all SME retailers in their ability to continue trading and around 60 per cent have actually been forced to reduce the number of staff they employ. Many of these companies also claim that, despite the Bank of England base rate of interest being at an all time low, the cost of their business loans have increased dramatically over the course of the past three months alone.
Jane Milne of the BRC said “As the government launches its employment schemes, it’s outrageous that some retailers are being forced to let staff go because of a lack of affordable credit. The poor availability of bank credit is undermining stock levels and retail employment. We understand the banks’ current cautious approach to lending, but there’s no reason why they need to stop loans to fundamentally sound businesses. I’m shocked to hear that over 40 per cent of SME retailers said banks had increased the cost of lending in the last three months. We should all be doing our bit to help speed the recovery. How can these increased charges be justified?”
