Hunting credit, firms look beyond wary EU banks

When David Armitt needed to refinance loans last year for his 153-year-old manufacturing company in Yorkshire, he found British banks reluctant to lend. The finance director in Huddersfield turned instead to San Francisco-based Wells Fargo, borrowing $28 million after putting up as collateral the gearboxes that his firm, David Brown Gear Systems, makes to propel nuclear submarines. European Union banks have shrunk their loan books by over $5.5 trillion, more than a tenth, since the global crisis of 2007-08, cutting risk on their balance sheets but choking off credit to companies and stalling the region's recovery. Faced with this retrenchment, businesses have looked elsewhere for alternatives, using asset-based loans and turning to bond markets, private equity firms, insurers, their own suppliers and even crowds of private savers to raise funds.

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