Almost one in two small and mid-sized companies in North Wales are likely to be facing adverse bank charges or other amendment to their facility, according to a study by a network of leading accountants and business advisers.
The Corporate Finance Network, which is represented in North Wales by Bangor and Llandudno accountancy firm Williams Denton, surveyed 20,000 SME business clients and found that the main lenders had enforced changes on 47.8 per cent of respondents in the last two years.
Of those who had faced changes to their accounts, the majority suffered a reduction in their overall lending facility, while around nine per cent had faced an interest rate increase.
Peter Denton, director of Williams Denton, recently represented North Wales on the Micro-Business Task and Finish Group and reported to the Welsh Assembly on the barriers to growth faced by small businesses. He said the survey highlighted the financial challenges many SMEs are facing.
“Although I had heard of banks restructuring businesses’ lending facilities, a task that many institutions needed to undertake to repair their own balance sheets, I was surprised to see that the numbers were so high,” Peter said.
The research showed the average business overdraft rate to be 4.75 per cent, while the loan rate was strikingly similar at 4.7 per cent. The average turnover of the businesses surveyed was £2.6 million.
Peter added: “This research demonstrates another major shift in the lending environment. All businesses should ensure they are well prepared for their annual overdraft renewal meeting, so that their relationship with their bank continues on terms acceptable to both parties.”
Williams Denton is the only accountancy practice in North Wales to be a member of The Corporate Finance Network. The network specialises in helping SME and owner-managed businesses raise finance and buy or sell companies.
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