Small business have delivered a serve to the banking business over the cost of credit and its availability, in specific targeting the big four, who are presently engaged in a turf war more than which of them is supporting the sector the most.
The results of a quarterly survey of companies that make up 60 per cent from the country’s GDP have revealed an overwhelming sense of dissatisfaction with their lenders.
More than 80 per cent of the responses from 525 firms within the $1 million-$20 million annual turnover category mentioned their banks had shown small or no loyalty to them, while nearly half of those surveyed said the cost of their loans had risen more than the past six months.
The typical rise of the increases was 8 per cent – a lot greater than official cash rates and well above the cost of inflation.
The businesses also identified four key factors that were inhibiting their growth, of which two had been directly attributable to their banking relationships.
More than 40 per cent surveyed mentioned access to credit and also the price and lending conditions were holding back their expansion, compared to about 20 per cent that said cash flow and lack of equity capital had been the primary hindrances.
The survey, by banking industry consultants East & Partners, goes to the heart of the argument between National Australia Bank on one side and Commonwealth Bank and Westpac on the other about support for small business during and after the global financial crisis.
NAB has claimed that the bias towards housing sector lending by other banks has resulted within the drying up of credit that could be made available towards the wealth-generating small-business sector. Commonwealth and Westpac have dismissed that view, saying the claim was an attempt by NAB to paper more than its poor performance in home lending.
No related posts.