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Bank branch managers must be held to account |
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FSB tells banks at new business forum: Bank branch managers must be held to account
Federation of Small Businesses survey names banks as the biggest growth barrier for small businesses The Federation of Small Businesses (FSB) is calling for bank branch managers to be held to account for their treatment of small businesses at the government’s new Small Business Finance Forum meeting this week, after small firms identified accessing finance from banks as the biggest barrier to their growth. In the FSB’s biennial survey of sector trends, members identified banks as both key to getting financial support, but also as one of the biggest barriers to their growth because of problems accessing finance. The FSB is using the Business Secretary Peter Mandelson’s new forum for small firms and banks to thrash out their problems to call on branch managers at a local level to implement announcements made at a national level; and to foster closer relationships with their business customers to help them achieve their future goals. Meanwhile, the FSB wants to see more banks applying for European Investment Bank money to distribute to small businesses as outlined in its new Small Business Survival package. The FSB survey of around 8,700 members, titled Putting the Economy Back on Track: Business Support and Finance, was compiled by professors at the University of Glamorgan, in Wales. It reveals that more small businesses thrive on personal relationships for advice in areas such as starting up; recruitment; marketing and product development, compared with the last member survey in 2006. The number of members who consulted their customers leapt from 15 per cent to 80 per cent this year. Around three quarters said they went to informal sources of support, such as other businesses, personal advisors, suppliers and family, compared with around 17 per cent last year. Meanwhile, the statistics showed that those who have used banks or the government as a source of advice have been dissatisfied with the service and described access to finance as a significant barrier to their growth. Mary Flavelle, FSB East Berkshire Chair said: “The figures show that small businesses thrive on personal relationships when seeking support such as marketing, recruitment and access to finance. However, there is evidence that new and growing firms, which require finance from their banks, are experiencing barriers to accessing funds and therefore not getting the same sort of close contact with their banks. “We would like to see the first meeting of the new Small Business Finance Forum call bank branch managers to account to ensure that they do more to show how they can support small businesses in order to help this crucial sector and get the economy back on track.” Dr Gary Packham, an author of the report and Head of Enterprise at the University of Glamorgan, said: “These findings illustrate that action must be taken immediately for small businesses to gain access to vital funds to ensure their growth and survival. People often do not realise that small businesses are the backbone of the economy, employing 13.5 million people and contributing over 50 per cent to UK turnover, therefore it is vital that this sector is given the necessary support and backed up by fair and flexible credit.” |
