A squeeze on credit is being blamed for the possible loss of 20 jobs at a Kent manufacturing firm.

Scarab Sweepers of Marden, a company with an international reputation for its road sweeping vehicles and other equipment, hopes the cost-cutting move will be achieved through voluntary redundancy or early retirement.

The firm says compulsory layoffs will only be a last resort if not enough volunteers are found from the 240-strong workforce.

Last year, Scarab posted sales of £30m, half of it from overseas clients. But this year, despite strong demand, especially from public sector clients, turnover is expected to be lower.

John Affleck, managing director, blamed the situation on a lack of finance available to clients.

He said overseas demand was holding up well, especially in France. The main problems were in the UK where in spite of an injection of billions of pounds from the taxpayer, banks were still failing to expand lending.

Mr Affleck said that the company was looking at various ways of cutting costs and was at a very early stage in its consultation with employees.

"We have asked for volunteers and we’ve also asked for other suggestions that people might have," he said.

"If we go down the road of making people redundant, it will be a relatively minor redundancy. Whilst it would be significant for those people, it will be less than 10 per cent of our workforce.

"If it happens, it will be purely a result - particularly in the UK - of the inability of customers to get hire purchase.

"If you buy a road sweeper, you’re going to spend between £50,000 and £100,000 and if you are a commercial customer, as distinct from one of the councils, then inevitably you will need HP to pay for it and credit is extremely hard to get, even from reputable large companies."