Banks have cut credit lines for 31 per cent of the UK’s largest consumer goods and retail firms, placing jobs at risk as businesses struggle to balance the books.
A study conducted by Roland Berger Strategy Consultants has found the while 71 per cent of firms surveyed consider these overdraft facilities as vital to their business, 26 per cent of firms have had credit lines completely cut and a further five per cent have been reduced.
Additionally, 46 per cent of companies do not expect to be able to fully renew their current credit lines in the next year.
“Companies are being deserted by banks on the one hand and customers on the other,” said Roland Berger’s consumer goods and retail partner Tim Mannaseh. “This is diverting the focus of many perfectly viable firms away from improving sales and profits, and onto avoiding insolvency.”