A report by finance consultancy Chaseblue has found that more than half of small businesses have suffered no change to their credit facilities, despite the recession. This certainly flies in the face of the prevailing wisdom, which suggests that squeezing any credit out of your bank right now is about as easy as finding a half-full glass of bubbly at Davos.
According to the survey, 52% of respondents reported no difference whatsoever in their banks' loan or overdraft facilities. Just 20% said changes in their banks' underwriting and risk policies had led to price increases during the last review of their banking facilities. And a mere 10% of respondents had failed to renew their banking facilities as a result of trading performance, or because of the bank's over-exposure to a particular sector.
You don't hear positive finance news very often these days. Indeed, read the business pages and the concept of readily available credit now seems oxymoronic. Luke Johnson's stark column in the FT today was characteristic, stating ‘the age of free money from mad lenders is gone. The growth game is over.' The cheeriness continued with Johnson warning: ‘we should prepare for a wrenching and unstoppable redistribution of wealth,' citing the West's ‘self-indulgence' and lack of work ethic. Indeed, other glass-half-empty types may read back over this survey with a more critical eye: the fact that 52% of people don't have a problem getting their hands on the readies suggests that around half of businesses do.
Still, every positive story at least plants the seed that perhaps things aren't as bleak as they seem. There is a chance that we're in some sort of negative feedback loop: lending depends to a large extent on confidence, and the constant stream of bad news can only be undermining that.
The International Monetary Fund didn't help matters today, warning that the UK's depression will be the ‘deepest recession since the second world war,' predicting that the economy will shrink by 2.8% this year - compared to a 2% average drop for other advanced nations. At least there's one thing to take from this: credit where credit's due, we're still the best in the world at something.
In today's bulletin:
Shell profits fall on lower oil price (kind of)
Davos Day One: Reasons for cheer despite the long faces
Nintendo and Sony suffer in the Land of the Rising Yen
Bank lending: not ending?
Editor's blog: Sky's no limit