Builders merchants hold summit as suppliers battle credit crunch

Britain's builders' merchants are holding a credit-crunch summit next week to stop the construction supply chain seizing up.

Leaders of the Builders Merchants Federation have organised the forum as member firms are finding it harder to extend credit terms to contractors buying materials.

Federation managing director Chris Pateman said: "Many contractors don't realise the scale of the role played by the builders' merchant in keeping the industry buoyant.

"At any one time, merchants are extending upwards of £3bn in un-secured credit to account customers. Anything that threatens the merchants' ability to grant credit threatens the entire industry."

The Credit Crunch Forum will look at how to manage credit control, what methods of financing are available and how bad debts can be avoided.

Pateman said: "We are determined to provide our merchants with the best possible intelligence about what's happening in the market place.

And the best possible practice to ensure the stability of those vital trading relationships on which we all depend. This conference is a response to a deep and urgent need among our members."

One contractor said: "It's definitely harder to get credit at the moment from merchants and that has a major impact on us.

"We have to wait to get money from main contractors, so paying up-front for materials hits cashflow."