A report today from the British Chamber of Commerce (BCC) is critical of UK bank’s over their reluctance to offer finance to small and medium sized businesses despite the Bank of England’s £200 billion quantitative easing programme.
The BCC say that a third of the businesses it has surveyed have reported that access to finance has become harder during the last three months, with 64% saying that the situation had not changed in that period and just 3% feeling there had been an improvement in obtaining finance during that time.
David Frost, BCC Director General said;
“Our latest survey results show that the biggest issue facing British businesses is still demand for products and services. It is clear that the huge sums that have been injected into the financial system by quantitative easing are still not reaching small and medium-sized businesses in anything like the scale required for business to invest for future success.”
The report suggests that while obtaining finance is a key issue in the current economic climate, the problem is far deeper seated with over two thirds of company owners reporting that ‘lack of customer demand’ was a far greater issue to the future of their business.
The BCC has urged the UK government to introduce measures to improve confidence among UK businesses and suggest that scrapping the planned increase in National Insurance contributions in 2011 would be a good start.
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