Loan squeeze brings call for banks inquiry.
Barrie Williams, chairman of Business VoiceWM, claims small and medium-sized firms are being put in an "intolerable" position by being forced into the invoice financing route.
Speaking at theBirminghamoffices of lawfirmHBJGateleyWareing, venuefor the official launch of BVWM, he called onthe Treasury tomount aninquiry.
Mr Williams said: "I will be asking Treasury Ministers and the Financial ServicesAuthority to review the actions of banks when it comes to invoice financing.
"Now - since the recession has hit the Midlands - we are hearing ofmore and more firmsbeing affectedby the variable nature of invoice financing rather than the stability provided by term loans or overdraft facilities.
"In essence, this means a small and medium-sized business cannot plan ahead with traditional forms of finance but can only get funding cover on the evidence of existing sales.
"This is an intolerable situation and willdelay therecoveryformany.There is little doubt this is becoming a more prevalent practice by the banks.
"That iswhy I have asked the authorities to ascertain how much of bank lending here in the West Midlands region is down to invoice financing and what will be done by banks - a number ofwhicharepubliclyowned-togetback to forms of finance other than this."
The event, also backed by Birmingham Law Society president Bernard Shepherd, heard how important it was that the various business lobby groups had become onewhile at the same time retaining their individual identities.
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|Publication:||The Birmingham Post (England)|
|Date:||Oct 20, 2009|
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