Manufacturers find credit access easier

Manufacturing lending on up

Manufacturing lending on up

Manufacturers in the UK have revealed that they are starting to find it easier to obtain bank credit for the first time since the credit crunch.

A recent survey by manufacturing group EEF found that roughly the same number of companies found an increase in credit availability, as those who had not.

The result from April and May represented an improvement over the result from February and March.

Despite the increase in credit availability, the cost of lending remained a problem for many businesses, and data released last week showed that banks were falling short of their small business lending targets.

Figures released by the Bank of England showed that in the first quarter of 2011, the biggest five UK lenders only lent £16.8billion to small and medium sized companies, short of their £19billion a quarter target.

They did however report that overall lending to companies was £47.3billion, leaving the banks on course for their annual target of £190billion overall.

The EEF survey of nearly 500 companies found that 22% of those survey reported an increase in the cost of their credit for April and May, meaning that despite the credit being easier to obtain, it was costing more.

Chief economist, Lee Hopley revealed that “For the first time since the recession ended, manufacturers are reporting improving access to finance.”

“Hopefully, this will translate into better news on new lending in the coming months.”

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