Black Country firms stifled by lack of bank support

A GROWING the growing reluctance by firms in the Black Country to engage with the main banks will continue to stifle investment and growth in the area, according to the Black Country Chamber of Commerce.

Johnathan Dudley, managing partner and Head of Manufacturing Business at Crowe Clark Whitehill, is also chair of the Alliance for the Black Country, which is tasked with driving the chamber’s competitiveness agenda.

He said many firms needing growth capital were still reluctant to approach banks, mainly because it was perceived they wanted too much in return.

While the situation has been alleviated to a certain extent in recent years due to the emergence of challenger lenders, Dudley said the picture was far from perfect.

He said: “Clearly there is a growth in confidence in business and a willingness to do deals but after the problems of a few years ago there appears to be a reluctance of business to borrow from banks who businesses perceive require too much in return.

“Although this gap has been partly filled by challenger lenders and alternative finance sources, the growing reluctance to engage with banks will continue to stifle investment and growth.”

He said that Government schemes such as Funding for Lending and Enterprise Finance Guarantee had not worked and the processes were in urgent need overhauling and replacing.

“In addition, there needs to be a restoration of trust between the banks and businesses,” he added.
 
“We look forward to the opportunity of demonstrating to the Secretary of State for Business Innovation and Skills how support for an investment readiness programme for SMEs will result in an increase in business lending and deliver our aim to double the size of the Black Country economy.”

His comments came following the publication of the latest Bank of England figures on lending to non-financial UK businesses.