The manufacturers’ organisation has welcomed Wednesday's publication of the British Bankers Association Finance Task Force and urged moves to rebuild trust between businesses and banks.
The manufacturers’ organisation has welcomed today’s publication of the British Bankers Association Finance Task Force and urged moves to rebuild trust and transparency between business and the financial Institutions.
Commenting, EEF director of policy Steve Radley, said:
“The process of getting credit flowing again was never going to be quick or easy. But the task force’s recommendations should contribute to more positive dialogue on how to improve relations between banks and businesses, increase competition in the market and, ultimately, improve the flow of credit to companies that are seeking to invest and grow.
“The rules have clearly changed for both banks and businesses and hopefully we will now see some common ground between what the Taskforce is proposing and, the needs of businesses through the recovery.
“We need now to progress quickly towards a consensus on how we can increase transparency around lending decisions for all businesses including small businesses if we are to rebuild trust and improve business-banking relations. Any new lending models must address the needs of companies with ambitions to invest and grow, as well as the Banks’ needs to rebuild and protect their balance sheets.”
On the Business Growth Fund, Radley added:
“Manufacturers welcome commitments to provide growth capital to ambitious small businesses. But the Banks need to ensure there is sufficient finance available as well as offer alternatives to equity if the fund is going to meet the needs of most growing businesses.”
On transparency in lending principles, Steve Radley said:
“The commitment to publish lending principles for medium and large companies will provide greater transparency. However, problems with access to finance are still more persistent for smaller companies and this commitment needs to be extended.”
EEF has been monitoring credit conditions for manufacturing companies on a quarterly basis since Q4 2007.
The latest survey continued to show little in the way of significant change in the lending environment for manufacturers. In the two months to September, around three in ten companies reported an increase in the overall cost of credit, virtually unchanged for three consecutive quarters.
The survey also indicated a modest improvement in the supply of credit and the availability of new lines of borrowing, but this trend has been concentrated primarily amongst medium and large companies, with some small firms still facing constraints in accessing finance.
EEF (formerly the Engineering Employers’ Federation) works with manufacturing, engineering andtechnology-based businesses in the UK and is the largest sectoral employers’ organisation in the UK.
