More and more firms are being denied traditional loans by their
banks, a top businessman has warned.
And Barrie Williams, chairman of Business Voice WM, claims small
and medium sized firms are being put in an "intolerable" position
by being forced into the invoice financing route.
Speaking at the Birmingham offices of law firm HBJ Gateley
Wareing, venue for the official launch of BVWM, he called on the
Treasury to mount an inquiry.
Business Voice WM comprises the former West Midlands Business
Council along with the CBI, Chambers of Commerce and other
representative bodies to offer a united business voice for the
region.
Mr Williams said: "I will be asking Treasury Ministers and the
Financial Services Authority to review the actions of banks when it
comes to invoice financing.
"Now - since the recession has hit the Midlands - we are hearing
of more and more firms being affected by 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 will delay the recovery
for many. From the discussions we have had with businesses there is
little doubt this is becoming a more prevalent practice by the
banks.
"That is why 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 of which are
publicly owned - to get back to forms of finance other than
this."
The event - also backed by Birmingham Law Society, president
Bernard Shepherd, which recently became a member of BVWM -
heard how important it was that the various business lobby groups
had become one whilst at the same time retaining their individual
identities.
Mr Williams said: "The formation of Business Voice WM is a
significant step forward because now, there is no doubt, our
business community is united to get action so that our firms don't
just survive this recession - but thrive in the recovery.
"With the One Voice Group and the West Midlands Business Council
coming together to form Business Voice WM, we can say with
confidence that we cover every business sector, every size of
business and every part of the West Midlands region via our member
organisations."
The likes of the CBI, Chambers of Commerce, Federation of Small
Businesses, EEF, Institute of Directors and many other business
representative organisations were now united within Business Voice
WM.
It incorporates organisations representing around 200,000
businesses in the heart of England.
Mr Williams charged: "Our focus is clear - to ensure that the
environment business operates in is conducive to commercial growth.
That means action on the transport logjams, action on the skills
crisis, and action on short term measures to mitigate the impact of
the recession upon Midlands' businesses.
"Both the One Voice Group and the West Midlands Business Council
were successful in getting action on these issues.
"But I am confident that - with the formation of Business Voice
WM - we can achieve a lot more for our community."
One example, was Business Voice WM gaining representation on the
Joint Strategy and Investment Board - it brings together both
senior figures from Advantage West Midlands and local authority
leaders to make the key decisions on regional economic development
and regional planning.
"We won't - now - be trying to influence decisions, we will,
with our public sector colleagues, be helping to make the
decisions."
But BVWM would be far more than just a strategy
organisation.
"Business Voice WM is here to deal with the bread and butter
issues that affect business as well as influencing the strategic
ones," said Mr Williams.