Businesses demand 'Scrooge-like' banks to lend

Date: 8th December 2008

Small businesses have demanded that banks resume lending as more firms struggle to access finance.

The latest statistics from the Federation of Small Businesses (FSB) show that about a third of business start-ups are having trouble attaining credit from major lenders.

What's more, 60 per cent of smaller firms have recorded a downturn in trade over the past eight weeks.

National chairman of the FSB, John Wright, said: "With trade down and invoices increasingly being paid late, small businesses are having to turn to their banks for credit to tide them over.

"Despite the government's £500 billion bailout, the banks still do not seem to be lending to small businesses."

He concluded that the ultimate result of this would be redundancies and potential closure for many business start-ups.

Recently, Halifax Bank of Scotland announced that it would be providing £250 million of European Investment Bank funding for the business start-up sector.