British firms denied credit

Steve Dinneen
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Nearly 60 per cent of businesses seeking bank finance last year were rejected, a survey from Britain’s Institute of Directors, published today, showed.

The survey of 1,045 directors showed a quarter tried to access funds from their banks during 2009. Of these, 57 per cent were declined, a proportion the business group said contradicted banks’ claims that the majority of lending demand was being met.

“The fact that over half of all businesses seeking finance last year were turned away by their banks is totally incompatible with the banking sector’s position on the state of lending in the UK,” said Miles Templeman, the institute’s director general.

The opposition Conservatives – favourites to win an election expected in May – seized the figures as evidence that government schemes to boost bank lending were not working.
Taxpayers, they said, were receiving a poor deal in return for the billions of public money that the government has pumped into the banking sector over the past year.

“This research makes a mockery of Gordon Brown’s claim to be giving ‘real help now’ to businesses,” said Tory Treasury spokesman Philip Hammond.