Business Optimism is down because of loss of trust in Banks
Business Optimism is down because of loss of trust in Banks
While Banks continue to be the main source of financing for business, more than 50% of the total of 1,560 surveyed business said that they have lost faith.
Taken from BBC News:
Businesses ‘lack trust’ in banks
Businesses’ trust in banks and other financial institutions is falling, according to a survey from the British Chambers of Commerce (BCC).
Half of the 1,560 businesses questioned said they mistrust banks and building societies, while 38% said they trust them less than a year ago.
Banks and building societies remain the main source of finance for firms.
Meanwhile, a separate survey revealed businesses’ hiring intentions fell to a 28-month low in September.
But the report from accountants BDO also said that business optimism showed a rebound this month, “continuing the zigzag pattern of ups and downs in confidence of the last four years”.
‘Repair relationships’
The BCC survey said 57% of firms felt confident they could secure external finance, while 37% said they were not confident of doing so.
Some 59% of those polled said a government-backed business bank would make them more confident about accessing finance.
But when asked about government-backed finance schemes, 43% of firms had not heard of any, with younger businesses and micro firms most likely to be unaware of them.
“Financial institutions need to rebuild trust and repair damaged relationships with businesses and improve transparency,” said John Longworth, the BCC’s director general.
“Regulators should look to increase competition in the banking sector to ensure businesses have more choice, and the government must ensure that plans to create a British Business Bank mean more funds available to growing businesses.”
