Lending still an issue despite the pressure on banks

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BUSINESSES in Hampshire are still finding it hard to access bank funds, despite pressure put on them to lend.

A business barometer survey from the Hampshire Chamber of Commerce found that a nine out of 10 firms were continuing to face borrowing difficulties.

A fortnight ago in Portsmouth representatives of Barclays and RBS banks told how both institutions were keen to lend to new and existing businesses.

And, as reported in The News yesterday, the Bank of England has released £80bn to high street banks to help them offer cheap lending to Small and Medium sized Enterprises around the UK.

According to the chamber, around half of all those struggling to get financing are firms with five employees or fewer, with a third of firms having a payroll of fewer than 20 employees.

The chamber’s chief executive Captain Jimmy Chestnutt said: ‘While the government should be given some credit for its efforts to encourage lending and create liquidity, ministers must keep up the pressure on lenders so SMEs can have access to funds in order to grow, invest and take on more staff.

‘Businesses have been battered by the banking crisis and the systemic risks of the eurozone and we need radical action to turn the corner.’

The survey found that only 12 per cent of companies have increased investment in training, while the numbers recruiting staff were down at 35 per cent compared to 46 per cent in the previous survey last quarter.

On a brighter note, 51 per cent of companies say they expect to increase profitability during the next year, and 64 per cent predict higher turnover.