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Firms 'wary of making business lending applications'

Date Added: 17/08/2011  

Many companies are resisting making applications for business lending due to wariness about their financial situation, as well as the state of the UK economy.

A spokesperson for Bibby Financial Services stated this is because they fear it could lead to a reduction in the amount of an overdraft they are allowed to take out with the facility.

They said: "It is up to the invoice finance industry to answer their calls and endeavour to meet the demand for funding to stimulate recovery."

David Webb, Bibby's representative for the East Anglia region, stated that the county appears to be faring well at the moment, despite the position the UK economy is in.

Speaking to the Cambridge News, he explained it is still important companies based in the area have access to business lending, as this could otherwise stifle growth.

"With further cuts in government expenditure planned, increased tax, fuel and rising inflation placing additional pressure on firms, businesses may still be in for a bumpy ride," Mr Webb was quoted as saying by the news provider.

Terry Wolfendale, Bibby Financial Services' spokesman for Wales, stated it is a "concern" how badly many of the country's small businesses appear to be coping with their financial difficulties caused by the UK economy's current state.

He pointed out it is a particular worry how few of the region's companies have a bit of money to invest in the organisation and foster growth by employing new staff.

Rising fuel prices, as well as regular and persistent cuts from the coalition government since it came to power in May 2010, were some of the reasons blamed for the struggles of Welsh businesses, with Mr Wolfendale saying these are factors affecting Wales' inability to recover from the recession.

"Access to external funding is more important than ever," he said.

Posted by Miles Pritchard 

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