Businesses Not Asking For Bank Loans
We have reported on several occasions in recent months on how the main high street banks are failing to support small and medium sized businesses in the UK by offering them the business loans they require in order to maintain and grow their company, despite the Government placing a huge amount of pressure on the nationalised banks in particular, to do so.
Although many people are ready to condemn the banks for failing to provide a suitable service with regard to business loans, a new survey has shown that only around one in five of small companies have approached their bank for a loan at all.
The news comes from the Federation of Small Businesses (FSB), who conducted the survey amongst more than 1,400 of their members, to find that only 18 per cent of firms had applied for a business loan.
Of those companies which have applied for a new loan, 50 per cent have been successful and been offered the business loan they applied for, 36 per cent have had their loan application rejected and the balance are still waiting to see if they have been accepted for a loan by their bank.
The survey also found that small businesses which already have an outstanding loan, have seen the cost of the loan increase significantly over the course of the past twelve months, with 12 per cent seeing the interest rate of their loan increase by more than 10 per cent.
John Walker of the FSB said “Trust needs to be restored between bank managers and businesses as credit conditions remain tight for small firms. We hope that the next government, of whatever hue, will look at the best way to address the issues in the banking system to ensure that the UK has the necessary financing structures to support further economic recovery.”
