Black Country firms face growth finance barrier

Trust lacking: Paul Bennett.

Trust lacking: Paul Bennett.

First published in Business Daily

BUSINESSES across the Black Country continue to experience problems when attempting to access the finance they need to grow, according to Black Country Chamber of Commerce.

A survey carried out by the Chamber shows that only 35% of businesses were confident of securing external finance from traditional high street lenders, with 43% stating that they were either “not very confident” or “not at all confident”.

Trust was one of the key reasons cited for lack of confidence.

Chamber president Paul Bennett said: “While the Government’s commitment to establish a business bank is a welcome move, the lack of trust between businesses and banks continues to be an issue, which must be addressed, particularly if any business bank is to work closely with existing lenders.”

He added: “There is a real need to return to the relationship banking of the past. The traditional relationship between businesses and the local bank manager has gradually disappeared, with increased centralisation and a lack of lending discretion.

“In many cases banks have lost their bespoke, personal touch and lack an understanding of their customers and customers fail to understand their banks. This is a key reason why fewer businesses are obtaining external finance.

“We need to encourage a culture and model of sound lending decisions based upon a detailed understanding of customers’ businesses by experienced staff with a sensible level of autonomy.

“"Rebuilding trust will be a long and difficult process but it is critical to help our businesses invest and create wealth and jobs."

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