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Not only that, but in its defence I would also
like to point out that Exeter has a number of In a market where unpredictability is the
empty shops on its high street for a very simple
reason. Back when the 'credit crunch' was
merely a twinkle in an American investment only reliable constant, his crystal ball must
banker's eye, a new mall opened off the high
street, and many of the larger chain stores
moved to larger and more modern premises in be working a lot better than anyone else's. I
the new development. So, although the fact
these shops have not been filled since can be
blamed on the current climate, they are not doubt many would dispute the fact that
empty because their original tenants were vic-
tims of the crunch. In fact, quite the opposite -
their tenants have moved on to bigger and bet- property prices will continue to fall – but by
ter things.
Endless negativity how much is any body's guess. But 15 per
But that doesn't fit with the agenda. Speaking
to members of the Association I am beginning
to sense a growing frustration that bad as cent is a nice, solid sounding chunk which is
things are, there do seem to be certain sections
of the media who, frankly, don't think it's bad
enough. In some cases there is an almost palpa- bound to worry people and therefore much
ble impatience for the 'credit crunch' to stop
messing about and become a proper, full-blown
recession. Every announcement of a fall in more likely to tick the right boxes
house prices is met with a barely concealed
glee: "The recession hasn't started again today,
so here's some more bad news just to make measures aimed at getting money through to savings to the tune of around £900 million,
sure that it soon will." In an economic market the SME market - something which has been while overdrafts were reduced by £100 million
which relies so much on confidence, the end- welcomed by small business groups such as the during October and November last year.
less negativity can wear down even the most FPB and the FSB. Despite many lenders still claiming that they
hardened optimist. Up until now some of the main high street will lend up to 80 per cent loan-to-value, the
Another case in point on the news last night banks have pledged their support to their exist- reality is often very different for any broker
was an 'industry expert' (I'll mention no names ing customers, saying that rate cuts will be looking to secure that level of funding for their
– but he is becoming a reliable source of bad passed on in full on overdrafts, variable rate SME client. The discrepancy between the
news and therefore I seem to be seeing him loans or commercial mortgages. This is all very advertised position and the actuality is allowing
more and more often) who was predicting a fine but doesn't address the problem of an speculation and generating more bad news as
further fall in house prices of 15 per cent. I absence of new lending. Getting lenders to pass in the current market people are assuming the
have to admit, I'm impressed. In a market on the full benefits of the base rate cuts worst.
where unpredictability is the only reliable con- announced by the Bank of England to their
stant, his crystal ball must be working a lot bet- customers undoubtedly helps existing business Government initiative
ter than anyone else's. I doubt many would customers on their existing business loans. But So the new Government initiative should be
dispute the fact that property prices will con- if banks aren't making new loans, then the welcomed for at least trying to get the wheels of
tinue to fall – but by how much is any body's amount they charge to make them is, at best, the SME economy back in motion as stagna-
guess. But 15 per cent is a nice, solid sounding academic. tion in the SME sector is hugely damaging to
chunk which is bound to worry people and the rest of the economy. Major high street
therefore much more likely to tick the right Accurate picture banks (Barclays, Clydesdale/Yorkshire Bank,
boxes on the 'end of the world is nigh' agenda. Trying to get an accurate picture of who is HBOS, HSBC, Lloyds TSB, RBS/Natwest and
The one thing most people can agree on is that actually lending is also tricky: the reluctance of Northern Bank) have signed up to the scheme
no-one knows what's going to happen next – many banks to admit a true lending position which should ensure the benefits reach as wide
with the exception of this particular pundit. coupled with loud proclamations of 'business an audience as possible. As I have argued
Either he's hankering after Robert Peston's job as usual', is actually fuelling negative suspi- before, the SME market is vital to the health of
– or Mystic Meg needs to watch her back. cions, rather than allaying them, as many sus- UK plc – without its survival and success the
pect they protest too much. Many lenders still rest of the economy grinds to a halt.
Good news say that they are very much open for business, So although 2009 hasn't got off to an exactly
But there is a little good news out there. After but speaking to NACFB members you get a dif- sparkling start, there is a little good news out
lobbying by the Association and other organi- ferent story. FSB members are also reporting there. And, although there's no arguing with
sations, Lord Mandelson's office at BERR have difficulties in actually getting their hands on the fact that the economy is in pretty bad shape
realised that the money they are giving banks any money; according to the small business (and likely to remain so for some months to
to lend to small businesses is not actually get- organisation a third of members have reported come), perhaps we can take a little comfort
ting through to the businesses that need them, problems accessing finance. Figures from both from the fact that although things are bleak,
and they are now taking action to change that. the banks themselves and the FSB show that they might not always be as bleak as they're
The Government has launched a package of small businesses were forced to dip into their painted.
February 2009 Commercial finance Introducer www.mortgageintroducer.com
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