Recruiters who rely on financing to run their businesses face changing credit terms and loan withdrawals as banks tighten their belts.

Mike Wynn, managing director of Construction and Property Recruitment, told Recruiter his bank pulled the plug on a property loan midpurchase, costing the business time and money.

“The banker agreed to lend us 75% of the purchase price and to allow us to fund the rest from working capital. Between telling us we could do it to pulling the plug we had already gone through with the deal. We had to go and find new funding.”

Wynn claimed that the bank’s decision to withdraw the loan had been skewed by his company’s involvement in the construction sector.

Mark Mitchell, chief executive officer of construction, commercial and healthcare recruiter Meridian Business Support, told Recruiter the cost of financing had gone up, as its availability was being reduced by banks.

Maxine Waring, managing consultant at industrial and office recruiter Wote St. Employment Bureau, told Recruiter her firm has a system which allows manufacturing clients to pay a set weekly amount, rather than varying the amount invoiced.

Responding to the concerns of SMEs, a spokesperson for NatWest and RBS told Recruiter: “We have already committed to maintain availability of SME lending at 2007 levels and we’ll deliver on that promise.”