Who’d be a banker? These days they are numbered among the least favourite professionals, next to estate agents and, ahem, journalists. The tax payer bail-out of several banks at the height of the recent economic crisis has much to do with that, as do those hard-to-imagine big bonuses.
But most recently banks have been under the spotlight over their promise to lend more to small businesses. Four banks signed up to the agreement – the quizzically named Project Merlin – committing them to lend more money in 2011.
Last month they were judged on their pledge and it was revealed that they missed out on hitting their target of lending at least £19 billion to small and medium enterprises (instead lending £16.8 billion).
The bad news was compounded with reports that the cost of credit is rising, furthering the financial woes of those requiring loans, overdrafts and the like.
In a trade full of small and medium businesses, the bike industry will certainly be feeling the effects of this. While it is hard to judge to what degree that is the case, it’s worth remembering that modest loans to small businesses can often be crucial and can even sometimes be the proverbial acorn from which mighty oaks are grown.
One such ‘oak’ is Chain Reaction Cycles. Celebrating its 25th year in business, the firm is one of the biggest cycle retailers in the cycle industry globally.
But back in 1984, when it was setting up shop in Ballynure, Northern Ireland, it was with a £1,500 bank loan that the firm established itself. And from that ‘acorn’ the firm went from strength-to-strength to become the huge company it is today, with over 300 members in the CRC ‘family’.
With credit for small businesses often a crucial factor in success, news of rising lending costs and missed load targets have an impact, probably largely unseen and unreported, but an impact nonetheless.
CRC is just one example of how important a loan can be in setting up a new bike business, but is the next cycle trade success story being given chance to get started by the banks? Do you know of any burgeoning bike businesses struggling to get affordable credit? I’m extremely keen to know, so let us know in the usual places. I’m contactable on firstname.lastname@example.org
Cycle Heaven recently told the Daily Telegraph that it had found it tough to get finance from its bank.