Banks now refusing construction companies any new loans

Contractors say that while lending banks are honouring existing loan agreements, no fresh lending is available.

The revelation comes in today’s issue of the Financial Times.

One message from the other side of the fence is that a list of leading banks including Lloyds TSB, National Australia Bank, Royal Bank of Scotland and Barclays, have told the FT that they are still lending to the commercial property and construction sectors.

The FT reports that the banks general verdict is: “Each business proposal is judged individually on its merits and had to meet certain credit criteria.”

The CBI employers’ organisation has appealed to banks to step up lending this winter when large numbers of businesses will need refinancing.

Asked about its relationship with property and construction clients, the RBS told the FT: “Provided it is a good deal which meets our criteria, we are still lending to these sectors.”

Barclays and Lloyds said they would consider each case on an individual basis.