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Friday
Aug142009

Superbanks failing firms claims small business pressure group

Britain’s 4.7 million small businesses want the banks to give them some credit for surviving the recession instead of placing obstacles in the way of trading.

Bosses also fear that the recession has created a cartel of superbanks that will make borrowing more difficult, warns the Federation of Small Businesses. The FSB is concerned that bank mergers, recapitalisation and schemes targeted at the big banks to stimulate lending as a result of the banking crisis risk are strangling choices of finance for small firms - leaving business owners with nowhere to turn if they are refused credit by the major high street lenders.

With a quarter of small firms still struggling to access affordable finance, the FSB believes the power of the financial sector should be challenged to guarantee a fair service for small firms. The FSB proposes:

    * Struggling banks should not be sold off to other high street lenders as this creates massive institutions that strangles choice and competition.

    * Local councils and government agencies should provide direct sources of finance.

    * A new, independent Post Bank offering banking and financial support for small firms through the Post Office could increase banking options.

Small businesses are a strong driver of the economy, with 500,000 businesses starting every year. They contribute more than 50% of the UK’s economic turnover and employ more than 13.5 million people.

FSB chairman John Wright said: "As the second anniversary of the credit crunch approaches, it is important to consider the impact of the banking crisis and what it means for future relationships with small businesses to avoid getting into a similar situation.

"Despite Government bailouts and interest rates set at a record low, small firms are still finding it tough to access affordable loans and overdrafts from banks. “

This is compounded by the fact that much of the support provided by the Government is only available through the banks and often this isn't replicated at branch level.  The FSB would like to see more alternative sources of finance provided locally such as through Regional Development Agencies, local councils or post offices.”

 



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    Superbanks failing firms claims small business pressure group - Tax, Legal & Business News from London - St Matthew Accountants London

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