Show me the money!

I am sure that many in the accountancy profession are experiencing the same confusion as me over bank lending.

The banks are telling us that they have money to lend and are willing to lend, in the press every day but the businesses that I work with are still finding it very hard to secure any lending from the banks!

The situation may be explained by an interesting conversation that I had recently with the son of a long term client of mine.

He has recently joined a major clearing bank as a corporate manager and been given a portfolio of small business clients and has been told to get on and start encouraging them to borrow money.

The only problem is every application he submits he gets turned down by the bank’s credit committee as not meeting their lending criteria.  He was therefore having an enormous gripe about the fact that he was being squeezed from both sides by his employer, the one side encouraging him to sell borrowing as much as possible whilst the other side is not prepared to authorise anything.

Whilst I would never encourage irresponsible lending, one does wonder if this goes someway to explaining the apparent contradiction we are currently experiencing. 

The banks are ready and willing to lend but their over cautious credit committees are doing a very successful job in preventing this from happening. 
Maybe we can believe what we read in the papers………..