Get lending before we disappear SMEs beg banks
TROUBLE getting new finance is still hampering small businesses across Yorkshire with nearly a fifth seeing an increase in bank fees, according to new research by the Federation of Small Businesses (FSB).
The findings are part of a new national survey of more than 6,000 FSB members, of which Yorkshire makes up 6%.
Nearly 20% of firms surveyed said they had seen an increase in bank fees while 33% said their banks were imposing a change in their financial arrangements such as setting new lending conditions with increased charges and rates, reducing overdraft facilities and requesting more security for loans.
A third of small firms said their bank was less helpful now than it was before the credit crunch began. A total of 98% said that the VAT cut had no impact on their business.
The survey findings show that some small businesses are using their own savings to continue to operate.
While many small ventures are coping in the short term, the survey shows that the long term impact could be that a significant number of businesses cease to trade.
On the brighter side, 48% of small businesses in Yorkshire said that they were managing to operate without reducing staff or hours although this has meant owners doing more work and longer hours themselves.
A total of 46% – 2% below the national average, said that they were not postponing future business plans and 59% said that they had not reduced their prices during the last 12 months.
However, 44% said that they were performing badly, or very badly; 25%reported no change and 30% said that they were performing well, or very well.
Around 80% said that they believed their customers were supporting them during the downturn but 29% did not believe that the tough trading climate will change significantly up to the end of 2010.
The survey found that most businesses were not sitting around waiting for things to improve but were tackling the credit crunch head-on by lowering prices where necessary and finding new ways to deliver value to their customers.
Professor Alistair Anderson, FSB small business professor and director of the Centre for Entrepreneurship at Aberdeen Business School, said: “These figures demonstrate that times are really tough for small firms and how access to finance continues to be a real challenge, with the majority indicating that the banks are failing to be more helpful at a time when small businesses most need their support.”
FSB Yorkshire and Humber policy chairman, Tony Cherry added: “The climate is clearly very tough and many small businesses are taking all the necessary measures to make the best of a grim situation.
“Even so, it is clear from Prof Anderson’s research that many may not be here in time to come unless the bank’s get their act together and start providing access to credit again.”
