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New finance beyond reach of Welsh SMEs

More than three-quarters of small businesses in Wales believe it will be a year or more before they can enjoy a full return to growth and better access to finance from the banks, according to a new survey.

And little more than in 1 in 20 say they have successfully secured finance through the major scheme which was launched to stimulate bank lending to SMEs, the Enterprise Finance Guarantee (EFG).

These are among the findings of the latest quarterly survey of small business owners in England and Wales from Clifton Asset Management (CAM), which provides specialist strategic and financial advice to SMEs.

In Wales some 77 per cent of respondents said they see a return to growth as being at least 12 months away.

Likewise 73 per cent say they have not detected any sign of an improvement in the lending environment for SMEs, despite the launch by the previous Government of the EFG. Only 7 per cent say they have managed to secure finance through the scheme, with another 3 per cent having had their application rejected.

"The UK has been lagging behind other major economies in emerging from recession and all the evidence suggests that the banks remain reluctant to lend," says Neil Greenaway, managing director at CAM.

"Our latest survey appears to confirm this gloomy prognosis, with a solid majority still of the belief that it will be well into 2011 before small businesses can expect to see a more benign bank lending environment.

"Similarly, it is clear from our research that the EFG has thus far failed in its stated aim of providing a mechanism for guaranteeing lending and new facilities for small businesses."