Half of firms have experienced the loss of at least one credit line, according to a European Association of Corporate Treasurers (EACT) pan-European survey during June and July 2009. The survey aimed to establish how borrowing conditions and banking relationships for companies have changed in the current financial crisis since September 2008.
- Nearly 30% of the companies have had at last one bank cancel credit lines.
- Banks have increased margins charged for the overwhelming majority (80%) of the companies surveyed.
- Margin increases have been at least 0.5% for one third of the companies.
- Banks have been relatively supportive in agreeing to increases in committed credit lines – 36% of the companies had made this request and in 64% of the cases the response was positive.
- Nearly half those surveyed do not see an end to the crisis earlier than 2011.
Commenting on the survey results, EACT Chairman Richard Raeburn said: “We can see clearly how corporate Europe continues to be affected by the banks’ actions in increasing the margins they charge on lending to companies. At a time when all businesses are struggling to survive and if possible grow – despite the recession – increased borrowing costs add to their burden. Many companies face reduced availability of credit and sadly the survey shows that this is impacting a high proportion of European business.”
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