New research shows 70 per cent of West Midlands SMEs believe the Government will be unable to persuade banks to increase lending.
A survey by financial advisory firm Anderson Locke found that despite the fact that 60 per cent of respondents are facing tougher trading conditions than they did 12 months ago, more than half believed they would be unable to obtain additional bank funding at present.
Principal Neil Wadsworth said: “The region’s small businesses are in a catch-22. They require financing to fund investment that will boost their competitiveness, but banks are very risk averse when it comes to SMEs, particularly in what are traditionally core regional sectors like property, construction, manufacturing and engineering.
“This inability to access bank funding will have repercussions once the government spending cuts come into force, especially given that recent research has cast doubt on the region’s resilience in the face of the cuts.”
The survey results reflected both pessimism and uncertainty regarding the proposed spending cuts, with 51 per cent of respondents believing they will have a detrimental impact on their business and a further 13 per cent unsure as to how they will be affected.
The Anderson Locke survey polled executives at 99 West Midlands SMEs across a range of sectors, including finance, manufacturing and engineering, media and marketing, property and construction, recruitment and training, retail and leisure, ICT and law.