A quarter of smaller building firms have missed out on contracts because they can’t secure funds from lenders.
That warning has come from the Federation of Master Builders, which also said many of its 1,000 members surveyed thought banks and building societies were actively discriminating against the industry.
The FMB has urged ministers to act after figure yesterday showed that the total lent by the Government’s Funding for Lending scheme fell significantly in the last three months of 2012.
In the FMB survey, more than 40 per cent of small and medium sized firms said they had found it harder to gain access to finance in the past two years, while 43% said credit had become more expensive and 25% were subject to increased charges for credit facilities.
Fears that banks discriminate against the industry were borne out, the FMB said, by 25% of firms reporting they had lost work as a result of failing to find finance, and 16% saying banks that had previously considered them trustworthy now refused credit explicitly because they are in the construction industry.
Some 18% of firms said they had employed fewer people as a direct result of these problems.
FMB chief executive Brian Berry (pictured) said: “Otherwise viable and successful firms cannot access suitable finance for business operations, including buying new equipment and plant. This is having a serious knock-on effect on jobs and growth in the sector.
“SMEs and the construction industry are continually touted as the drivers of economic recovery but, without access to finance, the sector will continue to decline.
“The Government needs to prevail upon banks not to discriminate against viable and successful firms just because they work in the construction industry.”