Credit cost is worrying, says FSB

Date: 27th April 2010

Small businesses in the UK with existing credit agreements with banks are facing a "worrying" level of costs, it has been claimed.

New research published by the Federation of Small Businesses (FSB) has revealed that 12 per cent of the businesses facing increased rates on their credit repayments have seen the cost rise by between ten and 14 per cent.

The FSB study showed that 16 per cent of all businesses are facing increased costs, 44 per cent of which have seen rates rise by two to three per cent.

According to the report just 18 per cent of smaller firms have approached banks recently looking for new credit agreements.

John Walker, FSB national chairman, said: "Small businesses continue to bear the brunt of the financial crisis and are being penalised with extortionately high interest rates.

"At any time, not least when the economy is on such a fragile path out of recession, a ten to 14 per cent increase in costs is highly unreasonable."

Posted by Anthony Burns