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FSB – reconnect banks and businesses

FSB – reconnect banks and businesses

Category: Economy

Updated: 16/04/2009
First Published: 16/04/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Relationships between banks and small businesses need to be rebuilt if the economy is to recover, the Federation of Small Businesses (FSB) has said.

With the Chancellor's Budget less than a week away, a poll of more than 70 per cent of FSB members revealed that they believed a corporate mediator would help foster better relations between banks and smaller businesses.

A corporate mediator, which is used in France and Belgium, would be charged with acting as an independent go-between, brokering agreement on decisions that have reached stalemate, including bank lending to small firms.

Specifically, the federation is proposing the mediator could: act as a point of contact for entrepreneurs and small firms having trouble getting loans or overdrafts; facilitate discussions between banks and businesses; mediate in cases where viable firms cannot secure finance; and report on trends and solutions to Government.

Figures also suggest that over a third of small businesses rated their banks as being less helpful since the downturn.

John Wright, national chairman of the FSB, said it was the Government's responsibility to take serious action in a bid to build bridges between banks and businesses to keep the economy moving.

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