A Midland businesswoman claims her company is struggling to stay afloat because of bank restrictions and a lack of Government help.
Debbie Heath, who took over Emscote Furniture in 2005, said the company is being threatened by her bank cutting the business overdraft and the Government failing to set up a “security plan” for small firms.
Ms Heath recently made a profit for the first time in the company’s history, but the 34-year-old fears for the future as the credit crunch continues to bite.
She said: “Suddenly the banks have tightened their lending and overdraft facilities and small businesses like ours have been hit by unfair cash flow problems.
“It isn’t that we don’t have a strong business plan or that we don’t have customers wanting to buy, but sometimes in businesses this size you need to keep the cash flowing to keep the suppliers happy and when the bank simply halves your overdraft facility you are left with big problems, she explained.”
Ms Heath said businesses need more than Government advice and called on Ministers to consider measures which would guarantee overdrafts up to a certain amount.
She added: “We have six people working here and the business is growing all the time but we just need a hand up during this difficult financial period. I don’t expect government handouts, but surely they can put forward some kind of security plan. They certainly did that when it was a big enterprise like Northern Rock so why not give us smaller businesses a chance.”
Ms Heath also hit out at the bank who have recently introduced credit controls.
“They aren’t willing to help us as a business, but, if I wanted to take out a credit card, they would lend me all sorts of ridiculous amounts,” she added.
“That can’t be a responsible way of controlling the economy and encouraging growth in the private sector.”
Despite the slump in the housing market and the credit crunch hitting companies in the DIY trade Ms Heath said that people were still very keen to improve their homes.
“There are still those that are wanting to spend money despite what we are told about the credit crunch,” she said.
The businesswoman raised her concerns about credit as banking giant HSBC launched a crackdown on lending to bars, restaurant and hotel groups.
It emerged earlier this week that Britain’s biggest bank is understood to be reining in its lending and overdraft facilities to some leisure firms as the sector struggles amid a sharp consumer slowdown.
The decision will add to the gloom in the industry, which is already seeing firms collapse, staff shed and pubs closed at a rate of three a day, according to recent industry estimates.
HSBC was also recently blamed for an estimated 100,000 wedding guests being left out of pocket after ordering presents through internet company Wrapit, which collapsed last week.
The online firm, which handles around 2,500 to 3,500 wedding lists a year, appointed administrators after spending the last few months struggling to refinance.
The company blamed the bank for withholding its credit and debit card income – which prompted a group of around 15 newlyweds who missed out on their presents marching towards the bank’s headquarters at Canary Wharf.