SME Business News

UK Bank representatives were set to get a grilling today at the Small Business Finance Forum, not just from the government, whose pleading is clearly falling on deaf ears, but also from representatives of the Federation of Small Businesses (FSB).

The FSB has been monitoring the banks behaviour, through its network of small business members, since the last meeting of the forum. The regional results have been collected as part of the Federation’s ‘Bank Watch’ programme.

The results will not make good reading at the forum, not only did 30% of small businesses report increases in the cost of new or existing finance in the last two months, but more worryingly, over 60% have seen trade decrease during the same period and 40% are being paid later.

FSB National Chairman John Wright said:

 “With trade down and invoices increasingly being paid late, small businesses are having to turn to their banks for credit to tide them over. But, despite the Government’’s £500 billion bailout, the banks still do not seem to be lending to small businesses.

“These figures show that with nowhere to turn, small businesses are having to consider cutting jobs and maybe even closing down. This would be a disaster for millions of employees as well as the economy as a whole.

“The FSB will be urging the Government and the banks at today’’s meeting to be more proactive and amenable in their lending practices. With interest rates down, it is more important than ever that the Government’’s Small Business Finance Scheme is put in place. The onus will now be on the banks and their branch managers to stop their Scrooge-like tactics and open their pockets to small businesses.”