Business secretary Vince Cable is being lobbied to ensure small construction firms can access credit from banks.
The Federation of Master Builders has called for small construction firms to be supported by banks, after Gordon Banks MP raised the issue with Mr Cable.
Mr Banks said: “At last the secretary of state is recognising the failings of the banks in respect of lending, and nowhere is it being felt more acutely than in the construction industry.
“High rates, and high set up and management costs are all impacting negatively on the sector. What the banks and indeed the government fail to grasp is that a strong construction and indeed housing sector is necessary for economic growth in the UK.”
He added: “The industry is also a major skills provider and without bank lending into the industry, skills targets will not be met and the UK economy will be all the poorer for this failing.”
FMB director of external affairs Brian Berry said: “The banks have decided that the construction industry is high risk, and good firms with exemplary credit histories are having facilities withdrawn and prices raised as a result.
“More than a third of FMB members have seen access to credit restricted and nearly half have had the cost of it increased. Banks have also restricted the availability of credit to construction clients, with nearly two-thirds of our members saying that access to credit is also hampering the commissioning of work by clients.”
Mr Berry said small building firms were needed to deliver many of the government’s objectives but were being prevented from doing so by a prejudice against construction firms by banks.