By Claire West
70% of Small Businesses believe the government will be unable to persuade banks to increase lending, according to a survey by financial advisory firm Anderson Locke.
Despite the fact that 60% 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.
“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 sectors like property, construction, manufacturing and engineering,” said Neil Wadsworth, Principal, Anderson Locke.
“This inability to access bank funding will have repercussions once the government spending cuts come into force.” added Wadsworth.
Survey results reflected both pessimism and uncertainty regarding the proposed spending cuts, with 51% of respondents believing they will have a detrimental impact on their business and a further 13% unsure as to how they will be affected.
The Anderson Locke survey polled executives at 99 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.