The Federation of Small Businesses (FSB) has welcomed a £1.3bn SME bailout fund which it has been lobbying the government for since October.
The FSB will promote The Enterprise Finance Guarantee to its members, with the aim of kick-starting the banks into lending again to help SMEs access finance to maintain cashflow, grow their business and retain their staff.
John Wright, national chairman of the FSB, said: “We are pleased to finally see the introduction of this fund, which mirrors the Small Business Survival scheme that we urged the government to introduce before the Pre-Budget Report in November.
“It is sad to see that since we proposed our package in October, small business closures have risen to about 85 a day, meaning more than 6,000 have closed while waiting for this fund.”
The FSB claims a third of its members have reported problems with accessing finance.
Recent research from banks, and the FSB’s own findings, show that small businesses have been forced to dip into their savings to find about £900m as overdrafts were reduced to £100m during October and November.
Wright added: “The onus is now on bank branch managers to actively promote this money to its small business customers to ensure their survival and the revival of the economy.
“The banks now have no excuses and we will be encouraging our members to apply for these funds while keeping a beady eye on the banks through our Bank Watch Scheme to ensure that they are lending actively and fairly.”
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