The number of businesses who believe that banks are being unsupportive has increased, according to insolvency trade body R3’s Business Distress Index. The quarterly report, which looks at the financial position of GB businesses, reveals that one in four (24%) businesses strongly disagree with banks being supportive, up 7% on September 2010 figures.

The Index also shows that one in four (24%) businesses are concerned about their debts. Over the last quarter, worry has intensified amongst businesses who are concerned about their debt, and small businesses seem particularly vulnerable. Forty-three percent of businesses concerned about their debts are now worried about bank loans and finance debt; this compares with just 24% in September 2010 – a 19% increase.

R3 President, Frances Coulson, comments:

“The increase in the number of businesses who no longer feel that banks are being supportive indicates that a growing proportion of the business community are either struggling to service their existing debts or finding it hard to acquire further lines of credit.

“As we have seen in previous recessions, once the economy begins to show signs of recovery creditors tend to make a more concerted effort to pursue those who are indebted to them and tighten up their lending facilities. However, we are still in the early stages of recovery and it takes time for this to translate into tangible relief for businesses. For the many businesses that used all their reserves to survive the recession, supportive creditors are more important than.......Can read more HERE