In 2008 as a 55-year-old owner manager of a specialist contractor with money in the Bank, I was looking forward to my early retirement when the financial institutions鈥� house of cards came tumbling down.
Now I read in the press that the very same culprits that got us into this mess seem to think they can start paying themselves fortunes again instead of helping us, their customers, avoid the recession they created.
When I talk to my fellow suffering contractors a constantly recurring theme is the lack of bank lending to SMEs. For what little there is the laws of supply and demand seem to apply, with eye watering 鈥渃harges鈥� that add percentage points to the already inflated interest rate.
No half a percent for SMEs!
The banks are obviously refinancing themselves by taking the cash out of UK industry and the current government seems happy to let them because they want their cut.
I can hear all the clients and main contractors who have been able to finance their projects because they simply owe the banks too much saying, 鈥渟o what鈥�. Well remember that SMEs are the people who actually fund the construction industry.
These 鈥渟ubcontractors鈥� who directly employ the labour, buy the materials and pay for the logistics no longer have access to funds. If clients and contractors continue to squeeze their supply chain through extended credit (payment abuse by another name) and insist on reduced prices (legalised bullying) they will be building their very own house of cards.
The industry has to find a better way to fund itself whilst maintaining the cash flow to the people who do the work or we will see many very good, long established specialist contractors going out of business.
Being squeezed between the 鈥渞ock鈥� of the banking system and the 鈥渉ard place鈥� that today鈥檚 contracting industry has become puts my retirement on hold.
Let鈥檚 hope those greedy bankers get the value of my investments back up to a level at which I can retire before the last drop of blood drips out!
Terry Wright is the managing director of architectural mouldings specialist Troika
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