A new survey has revealed that many Australia companies are experiencing difficulties in accessing credit, forcing them to fall short on their growth targets.
PricewaterhouseCoopers’ bi-annually Private Business Barometer of 758 businesses has revealed that 81 percent say difficulties in accessing credit could stop them meeting their growth targets in the next year, while more than 60 percent have had their debt levels reviewed by banks during the last six months.
The survey has found that banks continue to clamp down on Australian businesses, particularly Australia’s small to medium-sized companies. Half of the respondents said the banks had been more restrictive in regards to debt covenants, while more than 45 percent have had their loan rates increased. Almost 30 percent said they had been asked to put up additional security by the banks.
According to PwC partner, Greg Will, in an effort to get closer to business customers, banks have in fact taken a very hard line approach when it comes to funding.
“They are taking an inordinate amount of time to process information and asking for a lot of documentation, such as business plans,” he said.
“They are not actually looking at the commerciality of a business, they are looking at their lending policies and being very black and white.”
The report also found that, many businesses are struggling to find their way as the economy recovers, with 80 percent reporting they do not have a recovery plan in place.
Will says this lack of planning has hurt many businesses and will continue to do so.
“They are like a sailing boat on this big rough sea. The sea is taking them where’s its taking them, but they are not in control. Now there’s a bit more stability, they are looking back and seeing that they are way off course,” he said.