Small businesses call for more bank lending to help recovery
They are the backbone of the economy, but small businesses are still finding credit expensive and hard to come by
The recovery of the British economy is being hindered by the problems of the crucial small business sector in accessing credit, according to lobby groups.
As official figures show lending to businesses is continuing to fall, the country’s largest companies are bypassing the banks and issuing corporate bonds in record volumes to get funds.
But small and medium-sized firms (SMEs), which are the backbone of the British economy and crucial to any prospects of recovery, cannot tap the international capital markets. They have to go to their bank manager where they have been met with raised overdraft charges, refusal of new loans or the calling in of existing ones. That, say the experts
Stephen Alambritis, head of the Federation of Small Businesses, said: “If small businesses are able to get loans, they now come with all sorts of charges and fees added on. The government must really keep an eye on the banks because 89% of small firms are tied to the big four high street banks.”
The small business minister and former chairman of Standard Chartered, Lord Davies, agreed that criticism of bank charges was justified.
“They need to be more transparent about the level of charging to small businesses,” he told the Guardian.
“I think the volume of criticism of banks about access to finance has subsided but banks must be sure they are there to help small businesses grow and thus help the economy recover. SMEs are the lifeblood of the economy.”
source: guardian
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