Companies Still Suffering From Lack Of Bank Finance

Tue, 16 Nov 2010

Britain’s major banks have come under more fire in a new report which shows that small and medium enterprises (SMEs) across the UK are still finding it difficult to secure bank finance .

A survey of 605 online SMEs, commissioned by online auction site eBay, found that one in three were unable to get a business loan from their high street lender .

The recently-published research highlighted Royal Bank of Scotland / NatWest as the worst culprit of the UK’s largest banks, with 37 per cent of companies saying they had been refused finance by the part-nationalised lender .

HSBC was the next worst with 36 per cent of businesses unable to obtain vital funding, followed by Lloyds at 33 per cent, Barclays at 32 per cent and Santander at 19 per cent.

In its Online Business Index, eBay claimed that only Santander emerged "with its reputation relatively intact on the issue of lending ".

The company’s research also discovered that a third of SMEs which have had their loan applications turned down have been forced to rely on credit cards and overdrafts to fund operations.

The majority of businesses responding to the survey claimed that the banks had made little improvement in terms of their "helpfulness".

Jody Ford, eBay UK's director of SME businesses, said: "Government recently announced a series of measures to encourage enterprise in the UK, but it needs to do much more to get the banks lending . It is unacceptable that a third of SMEs are still unable to access finance ."

"SMEs have a difficult job trying to protect their profit margins and keep costs down, so it's concerning to see so many businesses being forced to rely on expensive bank overdraft facilities."
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