41pc of small firms are being refused credit

Posted in 'Credit Crunch' by Barry Stamp

20 June 2012

Small and medium sized enterprises (SMEs) in the UK are being squeezed further, according to the Federation of Small Businesses (FSB) in its latest quarterly survey of confidence.

Among the headline findings, 41% of SME’s applying for credit are being refused, 3.9% of survey respondents are announcing layoffs, and confidence has fallen in every industry sector except those working in health and motor services. Yet the FSB’s overall confidence index remains marginally positive at +1.3, down 0.9 points from the previous quarter’s findings.

20% of SME’s complain that access to finance is the main barrier to achieving their growth aspirations, which remain positive with 50% of all respondents hoping to grow over the next 12 months.

Bucking the general trend, confidence rose moderately in health and social work related firms, and in vehicle sales and maintenance companies. The financial and real estate services sector reported a ‘dramatic decrease’ in confidence, with further sharp falls in retailing, leisure, sports and entertainment, hotels and the restaurant and bar trade.

The FSB’s John Walker commented, “A further issue is that with 63% of small firms saying that fuel is the main upwards driver of business costs, we urge the Chancellor to cancel the planned 3p rise in duty for August."

Barry Stamp is a co-founder of Checkmyfile and is a Chartered Banker and a Fellow of the Institute of Credit Management. He can be contacted at barry.stamp@checkmyfile.com.