Category: Finance for Contractors

Small businesses, such as those run by freelance contractors, are reluctant to ask their bank for financial help, according to new research.

Figures from the Federation of Small Businesses (FSB) revealed that only one in five firms have approached banks for new credit.

Half of these were successful in their application for business funding, the FSB pointed out.

"Trust needs to be restored between banks, bank managers and business as credit conditions remain tight for small firms," commented John Walker, national chairman of the FSB.

He called on the next government to consider the best ways to address the issues in the banking system to ensure further economic recovery can be supported.

"Small businesses continue to bear the brunt of the financial crisis and are being penalised with extortionately high interest rates," Mr Walker added.

The FSB hopes the introduction of the Small Business Credit Adjudicator, announced in the Budget, will help ensure small firms are given a fair deal.

Alistair Darling's commitment to helping businesses was also welcomed by the Recruitment and Employment Confederation.

Posted by Daniel Frost