Latest figures show that bank lending to small and medium enterprises fell by another £435 million in the second quarter of 2014.
This further underscores that although banks are willing to lend more the situation for SME’s remains difficult.
The Bank of England recently commented that lending to “small businesses remains constrained with little change in banks risk attitude”.
Having suffered the consequences of their previous reckless attitude to lending the banks remain cautious in their dealing particularly in respect of lending to small and medium size businesses.
After the spectacular failure of their previous policies, there was always likely to be an excessive over reaction on the part of lenders.
The tragedy for many small businesses is that they are being strung along whilst banks prevaricate about increasing facilities and in the meantime much damage ensues.
Now more than ever any application for funding must be accompanied with a stand-up strategy together with evidence of strict control over all elements such as cash-flow, debtors and stock turn/ inventories.
In this current climate, the banks will look to any shortcomings and or operating deficiencies as justification to turn down increased funding and or to reduce or even call in previous agreed facilities.
No comments:
Post a Comment