Region's firms 'refused' loans by the big banks

Pleas by Cambridgeshire businesses for overdrafts and loans turned down by the established banks are estimated to be as much as £34m during the second half of last year.

Our newest bank, Cambridge Counties, owned by Cambs County Council’s pension fund and Cambridge college, Trinity Hall, has been analysing industry data covering 28,000 businesses in the county.

“Cambridgeshire is a hot bed of successful businesses, and many are leaders in their industries from a UK and, in some cases, global basis,” said Gary Wilkinson, chief executive of Cambridge Counties Bank.

“A number of these successful businesses are looking to raise capital, but it has become harder to raise funds from the big banks.

“Indeed, we estimate that local businesses could have been turned down for as much as £34m in loan and overdraft applications during the second half of 2011.

“This helps explain why our research shows that nationally 47% of the businesses believe that their relationship with their main business bank is only average or bad.”

The new bank provides SMEs with loans secured against commercial property as well as what it says is a highly competitive deposit account. It is also offering secured pension scheme lending and plans to launch professional firm financing, plus retail savings accounts.

n Commenting on the start of the Government’s Funding for Lending scheme, Jim Davison, region director at EEF, the manufacturers’ organisation said: “While there are positive signs that banks will respond to the scheme by lowering rates on some loan products, we still need a much greater boost from government and the banks to raise awareness of the scheme.

“A valid criticism of previous schemes to date are that they are not bringing forward borrowing that wouldn’t otherwise happen.

“If we’re really serious about bringing investment forward now when we need it most, we should be pulling out all the stops and beating the drum as loud as we can to bring the companies who’ve given up on our financial sector back through the doors of their banks.”

Funding for Lending allows banks and building societies to borrow at half the usual rate as long as they then lend to businesses and individuals.

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