Small businesses 'hampered by lack of lending'

Date: 29th October 2009

Small businesses across the UK are continuing to suffer due to a lack of flexibility ion lending, it has been claimed.

While big banks have benefited from state aid since the start of the economic downturn, Monetary Policy Committee (MPC) member Adam Posen has argued that smaller enterprises in other sectors have had no such help.

Indeed, he argued that the lack of a "spare tyre" to help small businesses along the road to recovery continues to pose a "major question".

Mr Posen added that many business owners are likely to be seeking the expert help of small business accountants as they look to balance their books.

Dr Posen said: "I am concerned because the financial system in the UK does not seem to have a spare tyre for the provision of capital to non-financial businesses when the banking system has popped a leak."

At the same time, he warned that the UK could experience a "lost decade", like that seen in Japan during its economic downturn in the 1990s.

Meanwhile, small businesses have been invited to apply for assistance from the government's new £4 million Health Work and Wellbeing Challenge fund so as to reduce employee stress at such a difficult period.