Business loans harder to secure

Securing a loan has become more difficult for over a third of UK firms in the last year.

The figures come from a survey carried out by finance provider Syscape.

According to the research, 38 per cent of firms that responded said that getting a bank loan had become more of a challenge during the past 12 months.

Only 9 per cent believed that lending conditions had improved.

Of those firms that have managed to agree loans, nearly three out of four thought that the lending margins were too high.

Some 82 per cent of businesses considered that the loan arrangement fees were too high as well.

The lending margins on business loans to SMEs averaged 2.91 per cent in June compared with 2.08 per cent for the same period a year ago.

Philip White, Syscape's chief executive, said: "This is an alarming percentage of companies who are actually saying that access to bank loans is still worsening."

The legacy of bad debts means that banks are looking to build reserves of capital, the net effect of which is that they cannot meet the growing demand for finance from UK businesses, Mr White added,

He said: "Small businesses aren't just making this up. There is a real problem."