FSB: Trust between banks and small businesses needs restoring

Date: 16th August 2010

Small business accountants may benefit from a restoration of a trustful relationship between companies and banks, it has been suggested.

According to the Federation of Small Businesses, the deterioration of close links between money lenders and small firms is one of the principal causes of a lack of access to finance for such companies.

The FSB's head of policy Andrew Cave said: "It's about having a relationship that's based on trust with a person in the bank so that you have got the confidence to go out there and bid for contracts."

He claims that, following the recession, a lack of understanding between banks and small businesses are preventing the latter from taking financial risks.

"Instead of banging on to the banks about access to finance, what we need them to do is return to that older model of actually helping and working with small businesses," he said.

Mr Cave's comments follow a recent statement by the British Bankers Association that a taskforce to examine why Britain's banks are failing to lend to small businesses has been launched.

Posted by Emma Clarke