Banks Must Start Offering Loans To Aid Economic Recovery
The effects of the credit crunch and banking crisis have had a severe impact on the banking system in the UK, resulting in banks and other loan companies becoming extremely reluctant to offer loans to either individuals or businesses.
But the Federation of Small Businesses (FSB) has issued a warning, stating that banks and other lenders must start to offer business loans at more normal levels, if the UK is top stand any chance of economic recovery. The FSB say that small businesses are a vital part of any economic recovery and in order to be able to operate effectively, they need to be able to obtain funding through bank business loans.
The FSB has also called for a much greater level of competition within the banking and business loan sector and has encouraged the introduction of alternative sources of loan funding for small businesses, such as Post Office banks and local authority run banks. The FSB has also called on the Government to introduce and enterprise allowance scheme, designed to offer help to those individuals looking to start up a new business venture.
John Wright of the FSB said “Britain’s five million small businesses will have their plans in place to grow and to flourish, many of these plans will be fragile but important nevertheless. They can only do this if they are allowed to get on with business as usual. One of the most important things that must be done in the coming year is for banks to return to their normal lending criteria and to start playing their role as lenders with a large dose of modesty. By turning Post Offices into Post Banks we not only save our valuable Post Office network, but we also provide a further source of funding for small firms.”
