Credit 'problems' at London firms

Nearly a quarter of businesses in London have had difficulty accessing credit as a result of the financial downturn, a survey has shown.

In addition almost 35% of businesses said credit charges had risen and conditions had changed this year.

The London Chamber of Commerce survey quizzed 287 businesses in the city.

A spokesman for the trade body said that if businesses cannot get "affordable" credit, "trade is not done and business can seize up".

Small to large businesses from a wide range of sectors in London were questioned in the survey.

An average of 23% said they were currently experiencing difficulty accessing credit, which they attributed to the global financial crisis.

Government action

More than 70% denied that the effect of the credit crunch had been exaggerated by the media.

However London businesses were split on whether the government had done enough to deal with the economic downturn, with 40% of respondents agreeing it had and 35% disagreeing.

London Chamber of Commerce and Industry trade director Peter Bishop said: "The implications of small businesses not being able to get access to credit at affordable rates is that they are without the lubricant of trade - trade is not done and business can seize up."

Earlier this week Bank of England Governor Mervyn King and Prime Minister Gordon Brown conceded that a recession in the UK was likely.

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