Small businesses have complained banks aren’t lending enough and that the price is too high, while banks say they are lending more than ever before at fair price, Small Business Minister Craig Emerson says.

Mr Emerson has convened a roundtable to discuss small business access to credit during the global financial crisis, to be held in Melbourne on Friday.

Mr Emerson said small businesses complained that there wasn’t enough money available from banks and the cost of available finance was too high.

“On the other hand the banks are saying they are now lending in the order of $20 billion more to small businesses than they were in mid-2007,” he told ABC Radio.

“They do concede on the price side that all the reductions in the reserve bank cash rate have not been fully passed through, but then they point out that quite a lot of the money they lend they actually obtain from overseas and the price of that has gone up.”

Mr Emerson with all this claim and counter-claim, the best approach was to get the two sides together.

He said he would like to see the banks give assurances that they would provide ample funds for viable small businesses, existing and new, at reasonable cost.

And as the cost of funds decreased, they should do everything possible to pass that on to their small business borrowers.

“Banks themselves point out that it’s a more risky environment with what’s happening around the world than it was a couple of years ago,” he said.

“They say they are keen to take on new customers’ viable small businesses.”
Mr Emerson said the change appeared to be that banks were now extremely risk averse, and that was affecting the amount of credit and the cost.

He said he could provide a clearing house service through his own office.

Businesses could email their accounts of how they were treated when they sought finance, and their stories would be referred to bank management, not just to the branch that dealt with.

“And I am happy to do that,” he said.

AAP