SMEs waiting five weeks for loan decision
Isme survey finds more than half of small firms refused credit by banks
More than half of all loan applications made by small and medium sized enterprises (SMEs) in the last three months have been declined by the banks, a new survey has found.
In the latest quarterly bank watch survey, business lobby group Isme said some 52 per cent of businesses were refused credit by their banks.
Of the firms that applied for credit facilities, 65 per cent said the banks were making it more difficult to access finance, with 40 per cent of companies reporting an increase in bank charges.
Some 95 per cent said the Government was having either a negative or no impact on SME lending.
The survey found that 15 per cent of initial bank decisions were made within one week, with the average wait now five weeks. The average wait has increased by one week since last December, while the number of decisions made within on week of applying has nearly halved.
Calling on the government to install better management in bailed-out banks, Isme chief executive Mark Fielding said the level of engagement of the rescued banks in assisting the SME sector was “negligible”.
He said the banks were deleveraging through curtailing SME lending, adding that economic revival needs a properly functioning banking system.
“The experiment of leaving the banks to their own devices and expecting voluntary codes to solve the problems must now cease.
The survey was carried out last week and attracted 1134 replies.