Is the HSBC $5 billion fund enough?
The new five billion-dollar fund which HSBC has put aside for the small-business sector has been applauded by many in the UK and around the world but there are concerns that it is too little too late. While Small businesses in the UK are suffering, this situation is being replicated around the world where small businesses are being squeezed through lack of liquidity and weakened balance sheets. So far it appears that many UK banks in particular have yet to take up additional funding made available from the EU which had been earmarked especially for small businesses.
Confidence in the worldwide small-business sector has never been more subdued and this is leading to more and more companies going under. Finances are weak, business is down and unemployment is starting to increase which has created something of a doomsday scenario for many small companies. The government has attempted to step into the breach but so far an agreement with the UK banks, aside from HSBC, does not appear to have been honoured and there are concerns about the short to medium term outlook.
Many people do not appreciate how important the small-business sector is to the UK economy and the longer the recession drags on the more companies will suffer.
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