FSB pushes for £1bn SME bailout fund

Small business trade body calls on government to supply same principles to SMEs as it did to banks

The Federation of Small Businesses (FSB) has proposed a £1bn bailout to help smaller firms stay on their feet during the tough times ahead.

According to the FSB, the £1bn, offered during a six-month trial period, would be enough to stabilise the UK economy and save threatened jobs.

It would work by creating a £1bn Small Business Survival Fund - available to all small businesses. The Small Firms Loan Guarantee should be scrapped and reformed at the Survival Fund, the FSB has claimed.

The FSB is also calling for a more simplified and well advertised process for public procurement, and for big businesses which fail to pay their bills on time to be named, shamed and fined by Companies House.

According to FSB figures, smaller firms are owed an average of £30,000 by larger firms, pushing many of them dangerously into the red.

John Wright, FSB national chairman, said: "A lot has been made of the rescue package for big banks, but small businesses are at the heart of our economy, employing just under 60 per cent of the private sector workforce. A rescue package for small businesses is crucial to shortening the economic downturn and saving jobs.
“Small businesses need innovative and decisive action now as things are hard for them now. The proposed Small Business Survival Fund will, if the Government takes it up, mean that the millions of small firms in this country will survive the hard times and be able to put our economy back on track,” he said.