HUNDREDS of small and medium building firms have missed out on contracts because they can’t secure vital funding. And many are claiming that banks and building societies are “actively discriminating” against construction companies.
The Federation of Master Builders (FMB) claims its latest figures show the Government’s Funding for Lending scheme is failing to support construction, with lending falling significantly in the last three months of 2012. Now the organisation is urging politicians to take action.
More than 40% of construction SMEs surveyed said they have found it harder to get finance in the past two years, 43% reported that credit is more expensive than two years ago, and a quarter were subject to increased charges for credit facilities.
The study also confirmed widespread fears that banks are actively discriminating against construction businesses. A quarter said they had lost work as a result and 16% claimed they had been refused credit by a bank that had previously considered them trustworthy – explicitly because they work in the construction industry.
The FMB has written to Michael Fallon, the UK’s business and enterprise minister, calling for an end to discrimination against construction firms.
Brian Berry, the federation’s chief executive, said: “What we are seeing is that otherwise viable and successful firms cannot access suitable finance for business operations, including buying new equipment and plant. This is having a serious knock-on effect on jobs and growth in the sector.
“The Government needs to prevail upon banks not to discriminate against viable and successful firms just because they work in the construction industry.”