FSB calls for banks to ensure EIB funds reach small businesses

The Federation of Small Businesses (FSB) has today called on more banks to take advantage of funds from the European Investment Bank (EIB) after this morning’s announcement that the Government is expecting £4 billion in support from the EIB.

FSB National Chairman, John Wright, welcomed the announcement but warned that the funds must be actively promoted by the banks in order for the support to trickle down to small businesses

Speaking at a meeting with the Chancellor Alistair Darling, Business Secretary Lord Mandelson, EIB President Philippe Maystadt and business and banking representatives at the Guildhall, Mr Wright said the EIB funds were a step in the right direction following the FSB’s calls for a £1 billion Small Business Survival Fund last week. But he warned that banks and the Government must rewrite the application criteria to ensure that the money gets to those small businesses that need it right now.

The Government announcement comes after an FSB poll conducted over the last two days showed that a third of small and medium sized businesses have seen an increase in costs on existing and new finance in the last two months, while another one in three complained about a decrease in the amount of new credit.

John Wright, FSB National Chairman, said:

“The Federation of Small Businesses welcomes the £4 billion package of support announced by the Government from the European Investment Bank. We are pleased to see that the Government is moving in the direction set out by our blueprint of a £1 billion Small Business Survival package last week.

“The Government must insist more banks apply to the EIB so more small businesses can access the much needed funds. Over 80 per cent of small businesses use the four major banks yet only one – Barclays – currently supply EIB finance.

“We need to be assured that this money will actually filter down to small businesses. The Government and the EIB must do much more to promote the availability of EIB funds.”

ENDS

Notes to Editors

1. The FSB has over 215,000 members and exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.

2. The new terms for firms applying for funds set out by the FSB in its Small Business Survival package updates criteria from the Small Loans Firm Guarantee to include:

– Businesses with under £5.6 million turnover
– Businesses with up to 250 employees
– The age of business not to be an excluding factor
– Open to all business sectors
– 75 per cent guarantee to the lender
– Allow businesses to apply for intangible outcomes such as working capital and staff training, as well as tangible outcomes from finance

Contacts:

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128/07917628998
Prue Watson 020 7592 8121 / 07825 125695
Marc Shoffman 020 7592 8113 / 07595 067068

For regional FSB contacts please go to www.fsb.org.uk/regions