FPB expresses concern over lending rates

Date: 25th September 2008

The reduction of credit availability and increase in overdraft charges for small companies had led one pressure group to take action.

The Forum for Private Business (FPB) has urged banks to recognise both the huge contribution small businesses make to the economy and the difficulties they are facing.

Following the merger of Lloyds TSB and HBOS, the FPB also worries that that there will be even less competition between banks - resulting in less choice for businesses.

Chairman of the FPB, Noel Guilford, said: "Just as the funding requirements of small businesses are increasing because of the economic downturn, banks are cutting back on both the level of facilities they provide and the services they offer.

"Accessing finance in order to maintain a healthy cash flow … has become a matter necessary for survival as much as growth."

Cambridge University research published recently noted that despite the economic downturn, the number of small firms seeking finance between 2004 and 2007 has remained largely unchanged.