Firms 'struggle to get finance'
17th November 2009
Access to finance remains a problem for small and medium-sized firms, despite the extra £200bn pumped into the UK financial system, a report says. The British Chambers of Commerce (BCC) said a third of the companies it had questioned found access to finance had become harder in the past three months.
This compared with just 3% who said the situation had improved, and 64% who said it had not changed.
The government has pumped the £200bn into the economy to help boost lending.
Customer demand
"Our latest survey results show that the biggest issue facing British businesses is still demand for products and services," said BCC director general David Frost.
"It is clear that the huge sums that have been injected into the financial system by quantitative easing are still not reaching small and medium-sized businesses in anything like the scale required for business to invest for future success. "
Mr Frost also called on the government to introduce measures to improve confidence among UK businesses. Scrapping the planned increase in National Insurance in 2011 "would be a good start," he said.
Accessing finance is not, however, the biggest barrier to growth, the report said.
Just 18% of respondents cited lack of credit as the principle obstacle, compared with almost two-thirds that said lack of customer demand was the biggest factor holding them back.
The BCC's survey was conducted for its latest Monthly Business Survey, in which it asked 400 firms about the lending situation in the UK over the past three months.
It came after a separate report by the British Library's Business & IP Centre said newly-established small firms should be given some form of tax exemption for the first year or two of business.
The suggestion was one of 10 core findings in the study, which was conducted to coincide with the start of Global Entrepreneurship Week.
It added that a fast-track scheme should be created to help small firms patent ideas, and that broadband internet speeds must rise.
Source: BBC News
