FSB: Small businesses respond to the challenge of the credit crunch

Federation of Small Businesses releases new survey figures released at the FSB annual conference in Newport.

Small businesses continue to have trouble getting new finance, with nearly one fifth seeing an increase in bank fees, according to the latest research by the Federation of Small Businesses (FSB).

In a survey of over 6,000 members of the FSB, conducted by the FSB’s Professor of Small Business Alistair Anderson, 18 per cent, said they had seen an increase in bank fees. At the same time, 33 per cent said their banks were imposing a change in their financial arrangements which made them less well off – such as setting new lending conditions with increased charges and rates, reducing overdraft facilities and requesting more security for loans.

A third of small firms said their bank was less helpful now than it had been before the credit crunch began.

Worryingly, nearly 40 per cent of businesses also said they had had to reduce their staff levels, either by reducing hours or pay, full time to part time, or owners doing more work and longer hours themselves.

However, most respondents to the survey, which was carried out at the beginning of 2009, said they were not sitting around waiting for things to improve, but were tackling the credit crunch head-on. Demonstrating flexibility in the face of the economic challenge, respondents said they were lowering prices where necessary. They were also finding new ways to deliver value to their customers.

Around 60 per cent said their business was performing the same, or better, than last year. And 78 per cent reported that they felt their customers were supporting them through the difficult economic times.

Professor Alistair Anderson, FSB Professor of Small Business said:

“These figures demonstrate how times are really tough for small firms and how access to finance continues to be a real challenge, with the majority indicating that the banks are failing to be more helpful – precisely at a time when small businesses most need their support.

“However, small businesses are fighting back, with some good signs that small firms are doing what the sector does best: responding to the market and supplying their customers with what they want. This is borne out by nearly eight in 10 saying they feel supported by their customers.”

Ends

Notes to Editors

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 http://www.fsb.org.uk/.

Professor Anderson was appointed as the FSB as Professor of Small Business in late 2008, following a competitive tender process via the Association of Business Schools.

Alistair Anderson is professor and director of the Centre for Entrepreneurship at Aberdeen Business School, Robert Gordon University in Scotland. He also holds honorary and visiting positions at Aarhus Business School, Aberdeen University, Ballarat University and Lancaster University and is Editor of the leading European academic journal, Entrepreneurship and Regional Development and serves on the boards of several other international journals. After years practicing entrepreneurship, and running his own small businesses, he became interested in trying to understand how small business and entrepreneurs operate.

The FSB’s annual conference is being held at Celtic Manor, Usk Valley near Newport, South Wales from Thursday 19 March to Saturday 21 March 2009. Computer company Dell is the top sponsor for the event and insurance company Towergate is the main supporter.

The Exhibitors are Dell; RBS Worldpay – Streamline; School Governors’ One Stop Shop; Hospital & Medical Care Association; 123 Send; NFSE Sales & Publications; FSB Factors; FSB Diamond Account; Department for Innovation, Universities & Skills; Business Simplification Programme – BERR; Child Support Agency; DeVine Personalised Gifts; Independent Financial Services (IFS) Ltd; FSB Gold Club; Towergate Insurance Ltd; FSB Care – Red Arc; FSB Telecom; HM Revenue & Customs; Design Council; Abbey Legal Services; ASC Finance for Business; Co-operative Bank; Health & Safety Executive; Intellectual Property Office; Centrica plc (British Gas Business); Visa Commercial; UK Trade & Investment.

The conference will be opened by an impressive panel, including Councillor Noel Trigg the Mayor of Newport City Council. Other guests will include Secretary of State for Innovation, Universities and Skills John Denham, Secretary of State for Wales the Rt Hon. Paul Murphy MP, the newly appointed shadow business minister, Kenneth Clarke and the Deputy First Minister for Wales, Ieuan Wyn Jones.

Delegates will also have a chance to debate and ask questions at the FSB’s very own Question Time hosted by John Humphrys with a panel of cross party politicians. Renowned broadcaster Andrew Neil will give a motivational speech and four-times Paralympic Gold medallist, David Roberts will be congratulated by delegates on his achievement. Previous conferences have been held in London, Birmingham, Manchester, Edinburgh, Belfast and Leeds.

The Celtic Manor is the venue for next year’s Ryder Cup event

Contacts:

Stephen Alambritis: 07788 422155
Sophie Kummer: 07917628998
Prue Watson: 07825 125695
Marc Shoffman: 07595 067068

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