The Federation of Small Businesses, (FSB), today welcomed a new £1.3 billion fund for small firms – much needed support for small firms that the FSB has been campaigning for since October.
The Enterprise Finance Guarantee, which the FSB will be actively promoting to its 215,000 members, should compel banks to start lending again and help viable small businesses access finance which they desperately need to maintain cash flow, grow their business and retain their staff.
A third of FSB members have reported problems accessing finance. The latest figures from the banks, which support FSB findings, show that small businesses were forced to dip into their savings to the tune of around £900 million, while overdrafts were reduced by £100 million during October and November last year. This is evidence that the new fund has been a long time coming for those small firms struggling to survive. The FSB will be calling for it to be topped up as small firms use it to grow and thrive.
FSB National Chairman John Wright said: “We are pleased to finally see the introduction of this fund which mirrors the Small Business Survival scheme that we urged the Government to introduce before the Pre-Budget Report in November. It is sad to see that since we proposed our package in October, small business closures have risen to around 85 a day, meaning over 6,000 have closed while waiting for this fund.
“The onus is now on bank branch managers to actively promote this money to its small business customers to ensure their survival and the revival of the economy. The banks now have no excuses and we will be encouraging our members to apply for these funds while keeping a beady eye on the banks through our Bank Watch Scheme to ensure that they are lending actively and fairly.”