Financier blasts bank lending
1 min read
Another attack on the banking industry from fellow financiers citing "the continued lack of bank lending in the economy" has been launched on the back of research showing that 38% of SME owners in the country had been turned down for finance this year while a similar number had not even bothered to approach their banks for fear of being rejected.
Afraid of having their overdraft facility reduced or the cost of it increased, some 15 per cent didn't go near their bank.
The criticism comes with a warning from Steven Gee (pictured), Managing Director of Close Brothers Asset Finance's manufacturing division, that despite better than expected levels of growth in the UK manufacturing sector, continued pressure due to rising input costs could see the industry falter.
"The focus of manufacturers on getting their houses in order, whether that be through clearing backlogs, tapping into new markets outside the sluggish Eurozone or increasing domestic orders closer to home is paying off. But, the unprecedented jump in costs, due to high oil prices as well as the increasing price of metals, is a cause of major concern," Gee said.
"Costs have risen the most in the survey's 20-year history and it is only a matter of time before these overheads will have to be passed onto the customer, further reducing manufacturers' profit margins at a time when they need to be as competitive as ever."
The continued lack of bank lending in the economy added further pressure to an already hard-pressed industry, he concluded.
"The boost from manufacturing growth," he continued, "has steadied the markets, at a time when we need all the positive news we can get. However, due to the continued lack of lending in the market and increasing cost pressures, there was no growth in manufacturing employment in March, a clear indication of a lack of working capital for businesses to make key investments in their businesses."
