Published: Wednesday, 10th March, 2010 9:00am

You can bank on the irony

by Alan Bunce

Comments (0) | Print | Email

Four different bank managers have told me the same thing in recent weeks.

They are very much open for business. They may all be rivals and some may be government owned but they all sing from an identical hymn sheet. In fact a few months ago we did a feature on banking and the phrase 'we are open for business' came up in each conversation.

But when I am talking to small businesses they are similarly united in telling me the banks won't lend to them.

So what is the truth? At least one bank manager told me he has to meet lending targets that are rising each year. So it would seem he really has to commit money somewhere.

But why then does the last small business owner I went to see - a small manufacturer for building companies - say banks ran a mile when he wanted to borrow?

He tried to get credit insurance and seven out of seven insurers said 'no'.

He reckons banks and insurers hear the words 'construction industry' and immediately put up the shutters. The industry he confirms, is seen by banks as 'dodgy'.

Given that the problems the builders face stem from the way some banks behaved, given the bonus culture and given the lack of any political party to tackle the problem, you can only hazard a guess at where the credit crunch ironies will end.