Lending to small manufacturers in the West Midlands is showing tentative signs of picking up, according to a new survey by EEF.
The latest Credit Conditions survey, which surveyed almost 500 firms, provides some hope that the situation will have improved for manufacturers in the Midlands in the second quarter.
It comes after the banks fell short of their Project Merlin targets for lending to small and medium businesses.
According to the survey just as many small companies reported an increase in the availability of new lines of borrowing over the past two months as reported a decrease.
This compares with a balance of -11 per cent which was reported in the previous quarter.
There was a similar improvement in the balances amongst mid-size companies.
For existing credit facilities the balance of companies reporting decreased availability dropped from 11 per cent to seven per cent amongst manufacturers.
EEF Midlands region director Richard Halstead said availability of finance was not the only issue – the cost of borrowing remained a significant problem.
Mr Halstead said: “For the first time since the recession ended, manufacturers are reporting improving access to finance. Hopefully, this will translate into better news on new lending in the coming months.
“But availability is only part of the story and we also need to see costs coming down.
“Ensuring companies have access to the finance needed to invest and grow is critical for the recovery. “We need to see a sustained improvement before concluding that the actions taken by banks and government are bearing fruit and that no further measures are required.”