Member Article

Half of businesses think banks are supportive

NEARLY half of business owners believe that their banks have been extremely supportive over recent months, according to a survey.

The research carried out by insolvency trade body R3 found that 44% of those polled thought that they had been able to get the backing they needed from their banks during the third quarter of 2010.

Fewer than a quarter of the total number surveyed (22%) disagreed with this sentiment, with one in six (17%) saying they disagreed ‘strongly.’

Linda Farish, chairman of the North East arm of R3 and Director of Recovery & Insolvency at Newcastle-based accountants RMT, said: “It is perhaps surprising that, despite the negative tone of much of the public debate around bank behaviour, just one in six businesses actually agree with this stance.

“Whilst each company obviously has its own tale to tell, I have seen a significant general difference in the approach of the banks compared to their behaviour during the 1990s, when banks swiftly removed facilities - this time around, many of them are working with businesses, granting holidays on loan payments and extending loan periods.”

In terms of creditor support, over a third (34%) of business owners believe that HM Revenue & Customs has been broadly supportive over the given period, with a slightly lower percentage (30%) saying that trade creditors have been broadly supportive.

Ms Farish added: “Businesses have generally benefitted from supportive creditors so far, but this approach may not continue.

“As conditions change, so may the approach of major creditors, so it is vital that financially-vulnerable businesses seek financial advice sooner rather than later.”

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