Banks show ‘bias’ against builders, says FMB

A QUARTER of small building firms have missed out on contracts because they say they cannot secure funding.

Banks and building societies are “actively discriminating” against construction companies, the Federation of Master Builders (FMB) has warned.

The FMB has called on UK government ministers to end what it calls a bias against construction firms and boost the beleaguered sector with “alternative vehicles” after it emerged that net lending to consumers and businesses fell by £2.4 billion in the last quarter of 2012 despite support from the Bank of England’s Funding for Lending scheme (FLS).

The trade association’s survey of more than 1,000 member firms appeared to confirm widespread fears that banks are shunning construction firms, with 25 per cent of respondents reporting they had lost work as a result, and 16 per cent saying they had been refused requests for credit by a bank that had previously considered them trustworthy – explicitly because they work in the construction industry.

Brian Berry, chief executive of the FMB, said: “What we are seeing is that otherwise viable and successful firms cannot access suitable finance for business operations, including buying new equipment and plant. This is having a serious knock-on effect on jobs and growth in the sector.

“The government needs to prevail upon banks not to discriminate against viable and successful firms just because they work in the construction industry.”