The FSB has suggested that rhetoric being delivered by banking executives is not being matched by the local high street branches. They suggest that many of the mainstream banks promising interest rate cuts and continued access to finance are not delivering on the ground unless it involves overdrafts being converted to loans with high facilitation fees. But is this really the case?
The Federation of Small Businesses (FSB) has challenged bank representatives to honour the promises made by their chief executives.
The FSB is also urging the government to bypass the banks in distributing some £4 billion of European Union money designed to help small businesses survive the downturn. Instead of channelling the money through banks, the government could quickly set up a 'small business survival fund'.
According to the FSB, ˜Small businesses are getting hit from every angle, and banks aren't helping in the way the government envisaged when they announced the bailout. Small businesses are well positioned to survive the downturn, as long as they get the support they need”.
The FSB said its latest survey had shown that up to a third of small business owners would consider closing if the situation doesn't improve soon. Some 14% of small firms have already cut back on staff hours, while a further 30% are threatening to do so over the next few months.”
BUSINESS FORUM COMMENT
The Chief Executive of the Business Forum met with the area director and area manager of two of the largest High Street banks on Thusrday and each reassured that the recent interest rates had been passed on in full and there was no withdrawal of support from existing customers.
While they admitted that new borrowing would be subject to close inspection, which is hardly surprising under the circumstances, they were adamant that their banks were still lending and still supporting their customers by honouring the terms of their lending arrangements.
They also made a plea to their customers to talk to their bank managers if they anticipated getting into financial difficulties and not to wait until those difficulties had engulfed the business.
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Brighton & Hove Business Forum
Federation of Small Businesses