SME manufacturers last on the list for bank lending

Small firms in real estate received almost twice as many approaches in the past three months the survey from independent market research consultancy BDRC found. SME manufacturers also lagged behind same sized firms in construction, wholesale and hotel sectors. Ten per cent of manufacturers said they had been approached by their bank compared to an industry wide average of 15%. Manufacturers also picked up the wooden spoon on overpayments of loans and overdrafts. Businesses in the sector were least likely to reduce their facilities with excess payments, the study said. However, manufacturing firms did lead the way with successful overdraft applications, the report showed. Applications were more likely to be approved than for businesses in rival sectors. But the confidence failed to carry through to loan applications with just 4% of manufacturing businesses renewing a loan compared to 25% in agriculture. The results mark the first report of the SME Finance Monitor, which was launched by the Business Finance Taskforce to determine SME views on bank finance. Overall the study reported lacklustre demand for bank credit with 81% of SMEs using other forms of external funding. Over 70% of those firms who did apply had overdrafts approved the study found. Nearly 60% of applicants were given the green light on loans. The British Bankers Association said: "Confidence comes through as the vital element for the SME community if they are to invest and grow. All parties – banks, businesses, representative bodies and government – need to use the solid evidence from this ongoing survey to develop policy."