Business unaware of government’s flagship lending scheme
13/03/09 | 00:01
The British Chambers of Commerce (BCC) has today published the results from its latest Monthly Business Survey.
The results from 250 companies across the UK show that 90 per cent of businesses are unaware that their bank offered or utilised the government’s Enterprise Finance Guarantee scheme. Just one firm reported being offered a loan based on the government’s flagship scheme.
With cash-flow remaining a serious problem, 61 per cent of firms reported they were being squeezed by late payments. Furthermore, nearly a third of businesses with an overdraft reported that their banks had imposed increased overdraft fees on them in the last six months.
The key findings from the survey include:
- 90% of respondents were not aware that their bank offered or utilised the Enterprise Finance Guarantee scheme.
- 61% of firms stated that the late payment of invoices is affecting their cash-flow position.
- Over half of businesses seeking a bank loan either failed to secure one or did not receive a loan that met their actual financial needs.
- Of the businesses that had an overdraft (60% of the sample), 30% stated that they had seen an increase in the fees associated with that overdraft facility over the last 6 months.
Commenting, David Frost, Director General of the BCC, said:
"A lot more needs to be done to raise awareness of these schemes. It is business that will drive the UK out of recession and it is vital that banks support companies through what is an extraordinarily difficult time.
“The government needs to address the growing pressures on cash-flow within businesses, even beyond relationships with banks. This means scrapping the planned rise in National Insurance Contributions, calling time on harmful extra regulation and freezing the national minimum wage.”
Ends
Media Contacts:
Fiona Cunningham
Tel: 020 7654 5812
Email: f.cunningham@britishchambers.org.uk
OR
Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk
Notes to Editors:
The British Chambers of Commerce (BCC) is the National Voice of Local Business.
The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce serving business across the UK, which employ over five million people.
Results
250 businesses responded to the February Monthly Business Survey. The size breakdown of respondents is as follows:
52% 0-9 employees
28% 10-49 employees
7% 50-99 employees
10% 100-249 employees
3% 250+ employees
Business Banking
While the numbers were spread widely across banks, those institutions with the largest share were as follows:
Barclays 16%
HSBC 19%
Lloyds 16%
NatWest 16%
RBS 11%
Overdrafts and Credit Facilities
Of the businesses that had an overdraft (60% of the sample), 30% stated that they had seen an increase in the fees associated with that overdraft facility over the last 6 months.
13% of businesses stated that there had been a reduction the amount of credit that their bank is willing to offer in the last 6 months.
Loan Requests
Of the businesses that had actually attempted to get a loan:
20% of businesses stated that the bank offered them a loan that did not meet their request.
31% of businesses were refused a loan.
Only 1 business of the 250 sampled had a loan offered to them based on the Enterprise Finance Guarantee.
Obtaining a Loan
12% of respondents said that it is taking longer for decisions on loans to be made by the bank.
One fifth of respondents stated that the bank requires more information about their business before they are willing to lend.
Last three months Business Demand for credit/loan facilities
Over a quarter of businesses (27%) responded that their demand for credit/loan facilities had increased compared to a year previously. Only 5% said that their demand had decreased (the remainder stated that there had been no change).
Utilisation of Government schemes
90% of respondents were not aware that their bank offered/utilised the Enterprise Finance Guarantee, European Investment Bank funds or the Working Capital Scheme.
Banking Relationship
18% stated that their current banking relationship is helping their cash flow position.
15% of businesses stated that their current banking relationship is hindering their cash flow position.
Late Payment of Invoices
61% stated that the late payment of invoices is affecting their cash flow position.
How much longer is it taking for invoices to paid compared to 1 year ago
The following were the responses:
10% said up to a week
18% said up to 3 weeks
25% said up to a month
20% said more than a month
Protectionist Policies
36% of exporters are concerned that protectionist policies will affect their firm’s access to export markets.