Small firms need support to grow

Research by consultancy group, the Centre for Economics and Business Research (CEBR), revealed that bank lending to small companies had fallen by 4.5% over the past year, while borrowing costs had increased.

The study forecasted that 312,000 start-ups will be created by the end of 2010 and a further 297,000 in 2011, making a major contribution to replacing the 330,000 jobs estimated to be lost as a result of public spending cuts. Furthermore, these firms spend £1.1 trillion on their supply chain annually – 49% of UK business expenditure – and account for £1.6 trillion of total national business turnover, greater than the whole of the FTSE 100.

Read full article: http://www.growingbusiness.co.uk/small-firms-need-support-to-grow.html

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1 Comment

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  Steve Grice December 19, 2010 at 6:23 pm

  This fits in with what I have been seeing on the ground for some time – the banks are saying one thing but doing another. The latest BoE inflation report agreed that whilst the supply of credit to large companies was improving, small companies were still fiding it difficult to access credit. Pricing is also an issue – I have seen Barclays in particular offering some SMEs loans at 19.9%. Banks may say they are approving 90% of applications, but the bald fact is that many, many requests for borrowing are being turned down before the formal application stage is reached.

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