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Access to credit still hitting businesses

British businesses have reported that they are experiencing extreme difficulty accessing credit, and that they expect conditions to remain this way for at least another three months.

According to latest CBI research, almost 60% of firms who sought new or renewed finance lines said its availability had deteriorated in the last three months, 41% had seen no change and no firms saw an improvement.

Firms continue to expect the availability of new credit to deteriorate further over the next three months.

Two in five firms (40%) say they have cut staff numbers over the past three months as a result of the credit crunch, a slight increase on January (37%) and staff in many firms are working fewer hours. There was also evidence of cut backs on training.

Ian McCafferty, the CBI’s Chief Economic Adviser said: “Significant government measures aimed at restoring credit flows are gradually being put into place, but the pace of delivery is slow. As can be seen in this survey, businesses’ access to credit is just as difficult as it was a month ago.

“The cost of borrowing, the credit freeze and the lack of a solution on trade credit insurance are having a growing impact on business activity.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .