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05 February 2014

Business Secretary to address FSB Annual Dinner

Reference number: PR 2014 05

FSB News Release
PR 2014 05
I ssue date: Wednesday 5 February 2014
Business Secretary to address FSB Annual Dinner
The Business Secretary will speak to guests tonight (5 February) at the Federation of Small Businesses (FSB) Annual Chairman''s Dinner. National Chairman, John Allan will tell delegates that banks need to get finance out to small businesses, to solidify the recovery.
John Allan, National Chairman, Federation of Small Businesses, said:
"I am delighted the Business Secretary, Vince Cable MP, has taken the time out of his busy schedule to join us today.
"Small businesses confidence improved markedly in 2013. With this increased optimism also comes a desire to grow their business. As we hope to sustain this momentum in 2014, we are encouraging businesses to explore new opportunities and new markets, such as through the International Festival of Business.
"The Prime Minister called small firms ‘heroes and heroines'' at our Policy Conference last week, because they''ve taken a risk. What we need to see and what I''m calling for is the banks to take a risk too.
"We''ve heard the rhetoric on how each of the high street banks will help the smallest firms get finance and they are more likely to get accepted if they''d only ask. But we''re not seeing it. Our members aren''t going in for hundreds of thousands of pounds. No – on average they look to borrow around £25,000. That''s not a huge amount in the scheme of things and this is what the banks need to take a risk on.
"Cash-flow is king for these businesses. Many fall victim to late payment and often their margins are so tight, paying bills, rent or even staff can be challenging. Indeed – our research last week showed half of our members have been paid late in the last 12 months. It''s just not on.
"And – for those members still waiting to hear if they''re going to get compensation for the mis-selling practices of their banks (swaps) – it''s just not on that the process is taking too long. It is time the Financial Conduct Authority took charge of the situation to make the banks work faster. These sharp practices need to stop and firms must be able to trust their banks again.
"Reform of the sector is vital to rebuilding this trust. More banking competition on the high street as well as from alternative lenders will help this. Those businesses that have an application rejected should also look to appeal the decision. We know four in 10 usually have the decision reversed. If that''s the case I don''t see it''s much of a risk for the banks. Give small firms the financial backing they need and they''ll do the rest. That''s got to be beneficial for everyone."
Notes to Editors:
1. The FSB is the UK''s leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK''s Real-Life Entrepreneurs who run their own business. More information is available at and follow on twitter @fsb_hq.
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