The Federation of Small Businesses’ (FSB) poll of over 5,000 members shows that 30 percent of small businesses have seen an increase in the cost of new or existing finance in the last two months.
FSB 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 figures also portray a disheartening situation for small businesses with almost two thirds (60 percent) reporting that trade had decreased in the last two months and forty percent are being paid later for services and supplies. This has led to more than a third (35 percent) considering reducing employee numbers, 36 percent considering cutting staff working hours, 41 percent contemplating curbing future hiring and 39 percent even thinking about closing down.
Mr. Wright went on to say: “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.”
Aaron Turner, CEO of leading property search website, www.look4aproperty.com, commented: “The Government needs to force the banks to start lending—otherwise what is the point in having bailed them out with taxpayers’ money? The Government now holds a controlling share in a number of high street banks now. So why is it appointing itself to non-executive roles. My advice - get on the board and start making things happen!”
