FSB to confront bank’s Scrooge-like tactics at finance forum

Around a third of small businesses are still struggling to get affordable credit from the banks despite commitments to lend fairly, according to new figures from the Federation of Small Businesses (FSB).

The FSB’s latest member poll, released ahead of the Small Business Finance Forum meeting today (Monday 8 December), includes results from its regional monitoring of bank behaviour, Bank Watch.

The poll of over 5,000 FSB members shows that 30 per cent of small businesses have seen an increase in the cost of new or existing in the last two months.

The figures also portray a worrying economic situation for small businesses: over 60 per cent reported that trade had decreased in the last two months and forty per cent are being paid later for services and supplies. This has led to more than a third (35 per cent) considering reducing employee numbers, 36 per cent considering cutting staff working hours, 41 per cent contemplating curbing future hiring and 39 per cent even thinking about closing down.

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.”

ENDS

Notes to Editors

1. The FSB is Britain’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk

2. For the full survey results email marc.shoffman@fsb.org.uk

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.