Independent retailers looking to buy their first store are facing increasing difficulties accessing funds, according to business property agent Christie & Co.
“Banks have no problem lending money to existing businesses,” the company’s managing director for retail Steve Rodell told RN.
“The problem comes with those who are new to the industry. Before the credit crunch banks were far happier lending to everyone.”
Mahesh Odedra of Lake Avenue Store said he was only able to buy his 1,350sq ft Post Office store in Bury St Edmunds because of his personal finances and through help from friends.
“It was impossible to get any form of finance, and I had a healthy bank account with six figure savings,” said Mr Odedra. “Even when my financial advisor approached banks he was told the same thing.”
Hitesh Pandya, of Toni’s News in Ramsgate, said he knew of a retailer whose shop sale had fallen through three times because of problems with bank lending.
“I think banks have been avoiding retailers for a while – they haven’t wanted to support them.
“I’m hearing that it’s getting a lot worse lately,” he said.
However, Mr Rodell said retailers who find funding through symbol groups, suppliers or are already cash rich are not experiencing the same problems.