More businesses believe banks unsupportive
Friday 6th May 2011
The number of businesses which believe banks are being unsupportive has increased, according to insolvency trade body R3's Business Distress Index.
The quarterly report, which looks at the financial position of GB businesses, reveals that one in four (24%) businesses strongly disagree with banks being supportive, up 7% on September 2010 figures.
The Index also shows that one in four (24%) businesses are concerned about their debts. Over the last quarter, worry has intensified among businesses concerned about debt, and small businesses seem particularly vulnerable.
Some 43% of businesses concerned about their debts are now worried about bank loans and finance debt - this compares with just 24% in September 2010 - a 19% increase.
R3 President, Frances Coulson, said: "The increase in the number of businesses who no longer feel that banks are being supportive indicates that a growing proportion of the business community are either struggling to service their existing debts or finding it hard to acquire further lines of credit.
"As we have seen in previous recessions, once the economy begins to show signs of recovery creditors tend to make a more concerted effort to pursue those who are indebted to them and tighten up their lending facilities. However, we are still in the early stages of recovery and it takes time for this to translate into tangible relief for businesses. For the many businesses that used all their reserves to survive the recession, supportive creditors are more important than ever."
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