Nine out of 10 businesses are unaware that their bank offers loans under a government guarantee scheme that was meant to help tackle a crippling shortage of finance affecting the UK's firms.
The finding came in research by the British Chambers of Commerce, which suggests there is no sign that the squeeze on company finances is easing as late payment by customers and costly overdrafts continue to make life difficult for firms.
In a survey of 250 firms across the UK, British Chambers found that 90% of respondents were unaware that their banks offered loans under the Enterprise Finance Guarantee scheme. Only one of the respondents had been offered a government- guaranteed loan.
The results suggest there is widespread ignorance of a scheme that ministers hoped would go a long way to tackling the shortage of finance caused by the credit crunch.
The £1.3bn scheme is intended to support bank loans of up to £1m of up to 10 years maturity to businesses with a turnover of up to £25m.
David Frost, director general of the BCC, said: "A lot more needs to be done to raise awareness of these schemes. It is business that will drive the UK out of recession and it is vital that banks support companies through what is an extraordinarily difficult time."
British Chambers said the survey found that over half of the businesses seeking a bank loan either failed to get one or did not receive a loan that met their actual needs. Half of the firms that had an overdraft had seen an increase in the fees charged on the facility in the last six months.
Representatives of Small and Medium Sized Enterprises say the shortage of bank finance has hit SMEs especially hard.
The Association of Chartered Certified Accountants said in a report that governments needed to ensure they put as much effort into supporting smaller firms as they did into helping large businesses.
Helen Brand ACCA chief executive, said: "SMEs are likely to face increasing pressures in their business environment."
Source: http://www.theherald.co.uk/
