FPB calls for tax breaks for lenders

Date: 5th October 2011

Small business owners across the country have been encouraged by recent calls for improved lending conditions.

The Forum of Private Business (FPB) has claimed that offering tax breaks to private lenders will boost credit conditions for smaller firms.

Phil Orford, the organisation's chief executive, explained that such a move would create more routes to finance for smaller firms and allow private lenders to compete with mainstream banks.

The FPB welcomed chancellor George Osborne's acknowledgement of the issues in his recent speech, but called for a greater focus on small businesses.

"The government is trying to make the right noises by announcing a 'credit easing' scheme but doubts remain as to the form it will take and how it will work to free up credit for small businesses," Mr Orford commented.

"At best, it is a medium-term strategy that will require the creation of small business bond markets in the first place and there is a concern that the principle of bundling together mixed risk debt for bond trading is what sparked the credit crunch."

Posted by Emily Smith