When will the banks help small UK businesses?
While the UK banks have already signed up to a new charter, as part of the rescue package, promising to assist both larger and smaller UK businesses we have yet to see any meaningful change in packages and rates on offer. The last week has seen the government place some pressure on the sector to help out small businesses but some people believe this is too little too late for many.
It seems bizarre that the banks are looking to turn away business from the small business sector even though they have seen their own financing costs reduced dramatically over the last couple weeks. However, in their defence there are still many small businesses in the UK which are in serious danger of going under and further investment in these operations would be utter madness. We are arriving at a chicken and egg situation in that without additional finance companies will go under, although without an improvement in trading conditions it will be hard to justify further finance.
Quite what will happen in the short to medium term is very uncertain but we are sure to see more pain before we see the blue skies of an economic recovery in the UK.
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