Businesses and banks 'need a better relationship'

Date: 17/11/2011

Businesses, which could include those looking to buy 0800 phone numbers, need to establish better relationships with banks.

This is according to director-general of the British Chambers of Commerce John Longworth, who claimed access to finance is particularly important for small to medium-sized enterprises (SMEs) in the difficult economic climate.

Mr Longworth was commenting on the results of the SME Finance Monitor, which showed 33 per cent of firms declined to use external finance such as loans and overdrafts.

Although demand for this type of finance is falling, the banking industry still faces challenges that cannot be solved overnight when it comes to lending, he claimed.

"The fact that some firms are discouraged from seeking finance on the assumption that they will be refused highlights that a lack of trust continues to be a problem," Mr Longworth continued.

He also noted SMEs and financial institutions currently have a "fractious" relationship and businesses must be given better opportunities to switch to alternative providers if they wish.