The Federation of Small Businesses (FSB) has recently stated that recent mergers, recapitalisation and schemes to stimulate lending could create a bank monopoly and end up ‘stifling choices of finance for small firms’. Our recent customer survey has shown that small businesses are forced to become increasingly resourceful in order to secure funding in the current tough economic climate, as traditional lines of credit from banks have all but dried up. The fact that 250,000 small businesses are still struggling to access affordable loans does not come as a surprise, especially as last month it was reported that small businesses were turning to risky personal loans instead.
The FSB proposal to allow more institutions (such as Regional Development Agencies and the Post Office) to offer financial support should help some small businesses to improve their cash flow, which has been a major pain point for many small businesses during the recession. However, the FSB also needs to look at providing more sources of advice and support to small business owners that are struggling in the recession, especially around topics such as best practice financial management. Only 23% of respondents to our recent Intuit customer survey felt it had been easy to access external help, which clearly shows that efforts need to be redoubled to get vital advice and support out to small business owners.
For more information on the survey and some top tips on surviving the recession, read the Small Business Recession Review and Guide, and share with us your views and experiences on how to best navigate a business through a downturn.
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