Small businesses need a go-between to help rebuild ailing relationships with the banks and revive the flagging economy, latest figures from the Federation of Small Businesses (FSB) show.
More than 70% of FSB members responding to a poll in the run-up to next week’s Budget said they thought a corporate mediator would help to build better relations between banks and small businesses. The corporate mediator would act as an independent go-between, brokering agreement on decisions which are currently at a stalemate, including bank lending to small firms.
FSB research shows that around a third of small businesses consider their bank to be less helpful than before the downturn. A further 60% say there has been no change in the banks’ attitudes to providing finance in the form of loans and overdrafts, despite the difficult economic period.
While more than half of small firms prefer to communicate in person with their bank, rather than by letter, online or over the phone, many have seen their relationship with their local branch manager deteriorate over the past few years.
The FSB is calling for the Government to put in place a corporate mediator to resolve these problems, represent both sides in disputes and discussions and de-politicise the issue of bank lending. The FSB believes this would re-establish trust between banks and businesses during the recession and guide the economy into recovery.
FSB chairman John Wright said: “It is high time the Government took some serious action and built bridges between the banks and the small businesses which keep our economy moving. The future health of our economy depends on mending the relationship between small business and the banks; small firms and entrepreneurs need confidence to take the risks to innovate, grow and create jobs and take us out of the recession.
“In order to do this, they need to regain their faith in the banking system. Small businesses have identified a corporate mediator, one which works similarly to those in France and Belgium, as key to this revival.”