Despite interest rates being cut to the lowest they havebeen for 315 years resellers are still struggling to get their hands on credit.
According to a survey of its members, which include dealers, the Forum ofPrivate Business (FPB) has discovered that in the last three months of lastyear those small businesses trying to get credit struggled.
There have been criticisms of the banks for not passing oninterest rate cuts to customers and continuing to resist government calls toreturn lending activity to 2007 levels.
Just shy of half of those SMEs asked by the FPB had appliedfor credit and been partially or completely rejected by the banks. In addition40% of those queried said the cost of borrowing had gone up in the last sixmonths.
“Banks have not passed on, in full, the Bank of England’sprevious three cuts to the cost of borrowing because many clients have fixedrate rather than variable rate arrangements,” said Phil Orford, FPB chiefexecutive.
Getting hold of credit has been a constant bug bear for the channelas the banks have become more reluctant to provide finance.