West Midland manufacturers are still struggling to obtain finance despite a recent upturn in the fortunes of the UK’s banking sector.
The head of the Manufacturing Advisory Service – West Midlands said firms in the region had not seen the recent return to profits at UK banks translated into a lending increase to businesses on the ground.
Simon Griffiths, chief executive of MAS WM, works with companies in the region every day and said they were still facing major difficulties in accessing finance.
“While it is very good to hear the banking industry is slowly finding its feet, we are still receiving regular feedback from companies that are being hampered in their efforts to grow by a direct lack of lending,” he said.
“Given that just about every indicator out there shows us emerging from the downturn this just seems plain nonsense, but this is what we are hearing loud and clear.”
Mr Griffiths said that although accessing finance from the banks was a challenge, there was a great deal more that could be done on both sides to encourage lending and investment in new products, processes and services.
“I have visited numerous manufacturers in our region and those making strides forward are those that know exactly where they want to go and have put time into the three Ps – products, processes and people.
“Generally, these firms have embraced leading-edge technology for their production equipment and upskilled their employees to maximise the benefit of this technology.
“More often than not, there is either a unique or innovative product they can offer their customers and for which a premium price can be demanded.”
He also singled out the need for communication between banks and businesses to help each understand the other’s needs.
“Beyond that the re-introduction of local business bank managers, although controversial, could be of real benefit.
“In the days of a local manager he or she had such good working relationships with their customers and could spot a winner when one came along.”