Scottish Businesses Given Loan Availability Warning

Mon, 12 Jul 2010

Scottish businesses are being advised to search for alternative sources of funding amidst warnings of a second credit crunch in 2012. According to industry experts, a plethora of private sector loans are set to expire in 2012, including a number of five year loans agreed in 2007 as well as three year loans agreed last year.

Scottish chairman at PricewaterhouseCoopers, Frank Blin, commented that while large corporations will be able to obtain finance either through bond markets or equity, small and medium sized enterprises may struggle to find credit with banks remaining cautious owing to a mix of economic uncertainty and regulatory pressures.

Experts have commented that nationalised banks are playing their part in opening credit channels, but this willingness to lend is constrained by an awareness of the need to maintain sturdy balance sheets. Thus, the fears centre more around the demand for loans in 2012 far outstripping the supply.

The credit warning will set the alarms ringing at businesses across Scotland. The warning does not, however, apply to consumers, whose efforts to obtain personal loans and mortgages are ongoing.
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