The banks’ failure to support small British firms has sparked a surge in calls
to small-business organisations from worried company owners.
Small-business organisations say that in the past few months there has been a
big increase in the number of calls from members who are furious at the way
they are being treated by the banks.
David Frost, director-general of the British Chambers of Commerce, said:
“Businesses are getting angry with the pressure that is being put on them by
the banks. Support so far has been patchy from both the banks and the
government, and lines of credit have become complicated. Our helpline
received 1,052 calls in January alone, and there was a 231% increase in
calls about redundancy on last year — which shows how worried firms are."
The Federation of Small Businesses (FSB), which has 215,000 members, also
reports a big rise in calls. Since setting up a dedicated finance helpline
for its members last November, the number of calls has risen from 30 a month
to more than 250.
One of the key concerns for small-business owners is the failure of the
government’s £1.3 billion Enterprise Finance Guarantee Scheme, which was
designed to get banks lending to small firms again by guaranteeing 75% of a
loan. However, so far only 400 small businesses have received support worth
£40m through the scheme amid growing evidence that the high-street banks are
failing to provide access to it.
Stephen Alambritis at the FSB said: “The calls, letters and the e-mails about
problems with banks are at a high. The relationship between banks and small
businesses is deteriorating fast. If the bank manager is pulling the plug it
is a very lonely place out there. Small businesses want to be part of an
organisation that will voice their concerns. We will fire off a letter to a
bank manager and pick up the phone to an institution if they are not paying
our members.”
The Forum of Private Business (FPB), which has 25,000 members, said there had
been a 22% increase in the number of telephone calls from small firms
compared with this time last year.
The FPB’s Phil McCabe said: “Our figures show that calls are up significantly
year on year, which indicates the level of concern small businesses share.
They are seeking advice on government initiatives, and we are seeing an
increase in employment-related calls. We have also had a lot of calls on
banking and finance, specifically bank lending. A year ago calls about
accessing finance and restrictions in bank lending were few and far between,
but now they are every day.”
Alan Milliner is the owner of Strange & Blinding, an audio-equipment hire firm
based in Bethnal Green, east London. He joined the FPB last month.
“In recent times I have been having a lot of problems with clients not paying
and going bust and I wanted to be able to access the facilities the FPB
provides,” he said. “I am going to talk to them about clients going bust and
debt collecting and things like that. I want to see where I stand on a few
things.”
He added: “It is invaluable to have someone like that to call up and get
correct information. You just can’t get it quickly enough from anywhere
else. Having had a couple of incidents where we have come close to the mark
when people owed me a lot of money, it is so irresponsible not to be able to
do something about it. It is hugely stressful if there is nothing being
done. I can’t believe that more people don’t join.”
Small-business organisations such as the FSB and the FPB offer their members a
range of services such as financial and legal advice, legal representation
and savings on insurance and phone calls.
Business Link, the government-backed advice organisation, said that it has
seen an 80% rise in the number of small firms accessing its website in
search of help and advice. In January the website received a record 1.8m
hits, with redundancy, finance and grants being the most busy sections.
The Institute of Directors, which represents businesses of all sizes, said
that it had received double the number of calls from members to all three of
its advice lines — on business advice, tax and legal guidance — in January
compared with the previous month, and that calls to its business advice line
were up 27% in January against the same period last year.
Many of the calls were from small businesses concerned about finance and
seeking advice about making employees redundant.
- Are you angry about the way you are being treated by your bank? We want to
hear from you. Please e-mail us at smallbusiness@sunday-times.co.uk
WHERE TO GO FOR HELP
Federation of Small Businesses 01253
336000
Forum of Private Business 01565 634467
Chambers of Commerce 020 7654
5800
Business Link helpline 0845 600 9006
Institute of Directors 020 7766 8888
