Insolvency trade body, R3, has said that the anger towards banks in the media is being skewed by a ‘vocal minority’ within the business sector.
The comment came off the back of surprising results from a survey of business owners, which revealed 44% of business owners believe that the banks have been broadly supportive over the last three months to September.
The survey of 500 small, medium and large business owners by BDRC Continental uncovered that less than a quarter (22%) thought banks had been unsupportive of their business needs. Out of that group, just 17% of business owners disagreed ‘strongly’ that banks have been supportive.
Steven Law, president of insolvency trade body R3, said it was interesting that despite the negative tone of public opinion surrounding banks, only one in six businesses have felt unsupported by their banks.
He suggested that the negativity in the media was down to a ‘vocal minority’ within the business community, adding: “I have seen a significant difference in the approach of the banks compared to their behaviour during the 1990s. In the last downturn, banks swiftly removed facilities; this time around they are working with businesses – granting holidays on loan payments and extending loan periods.”
In terms of creditor support, over a third (34%) of business owners believe that HMRC has been broadly supportive over the last three months; and thirty percent of businesses believe that trade creditors have been broadly supportive.
Mr Law added: “Creditor behaviour has a significant impact on business survival and insolvency trends and this has certainly played a key role in stemming the tide of insolvencies. We’ve seen historically low interest rates keeping the cost of servicing debts relatively low; and HMRC’s tax-deferral schemes allowing businesses breathing space to pay their taxes.
“Businesses have generally benefitted from supportive creditors so far, but this approach may not continue. As conditions change, so may the approach of major creditors, so it is vital that financially vulnerable businesses seek financial advice sooner rather than later.”
Masthaven – commercial finance