It found that 63% of firms who sought new finance said its availability had worsened in the last three months. More worryingly, a similar proportion (59%) says it will deteriorate even further over the next three months.
The figures are from the first monthly CBI Access to Finance Survey, introduced to show the real impact the credit crunch is having. For example, nearly two in five (37%) firms say they have cut staff numbers over the past three months because of credit-related issues. This rises to almost half when it comes to large firms, 40% of which have also cut back on production.
Richard Lambert, CBI Director-General, said: "We have urged the government to move as quickly as possible to set out when the various support packages to tackle the credit crunch will come into effect, and to implement them quickly. Day by day, constrained credit is damaging our economy. A lack of clarity creates a 'fear the worst' mentality and could be costing people their jobs."
The CBI is calling on the government to put forward a clear timetable showing when different measures aimed at repairing credit flows will come into effect. This would increase business and consumer confidence, and help companies plan for the future, instead of firms simply cutting activity because they fear the worst and are not clear when the situation may improve.
The survey shows the very largest firms, employing over 5000 staff, have been hardest hit by the credit crunch. Of the companies who sought new credit, most of the largest sized firms (82%) reported their access has deteriorated in the past three months, over half (57%) of large businesses and under two-thirds (65%) of small and medium-sized firms (SMEs) say the same.
Looking to the next three months, two-thirds (65%) of the very largest firms say access to new credit will get worse, compared with 56% of large firms and 58% of SMEs. In the next year alone, CBI estimates that larger firms will need to re-finance over £100 billion of credit facilities in the UK.
Richard Lambert said: "This survey brings into sharp focus the effect of the credit crunch across the whole of business.
"The largest firms are suffering most, they're finding it harder and more expensive to get credit. Almost half of large businesses have cut jobs, and two-fifths have cut production."
The cost of finance has increased sharply for many businesses, particularly for new lines of credit. New borrowing costs are now more likely to be pegged to LIBOR rather than the Bank rate but, despite the recent falls in LIBOR, overall borrowing costs continued to rise. This was coupled with higher arrangement fees and slower, more complex administration.
Problems with trade credit insurance continue. Two-fifths (39%) of the firms surveyed use the insurance to cover the supply of goods, and two-thirds (65%) of these companies report its availability has worsened in the last three months. This threatens their ability to secure contracts and supply customers. The survey also shows that 72% saw deterioration in the credit limit insured, followed by numbers of customers insured (60%), slower and more complex renewal (56%) and higher cost of cover (50%).
Ian McCafferty, the CBI's Chief Economic Adviser said: "This survey clearly shows that obtaining investment capital is most challenging and that the credit crunch is affecting firms' ability to operate.
"It is not surprising that some firms have started taking pre-emptive action to safeguard their longer-term future.
"The lack of available trade credit insurance is also a real problem for firms that rely on it, and large businesses have been particularly hit."
