Accountants report small businesses are starting to struggle

Date: 24th July 2008

Accountants have reported that their small business clients are struggling to obtain finance at the moment.

According to accountancyage.com, new research from Venture Finance revealed that one fifth of accountants have seen their clients refused finance or had their funding restricted since the start of the credit crunch late last year.

The Venture Finance Accountants Spotlight Survey showed that around a quarter of all accountants thought their small business clients were now nervous about putting more cash into their operations.

What's more, 41 per cent said the government should consider slashing business taxes to counteract the effects of the economic slowdown.

Venture's managing director, Peter Ewen, said that the findings clearly indicated that stricter lending criteria and a general economic slowdown were now "starting to bite UK businesses".

Recently, research from CCH indicated that finance professionals believed the government should consider cutting corporation tax on small businesses in a bid to boost the country's competitiveness.

Martin Casimir, the executive director of CCH, said to the Press Association: "The focus is usually on income tax at general elections but, with the economy in trouble, tax experts are unequivocal about the need to ease the tax burden on the wealth-creating small business sector."