Phil McCabe

Phil McCabe Column

Forum for Private Business

ONE tenth of London’s small businesses are experiencing an upturn in trade, according to the Forum for Private Business’s (FPB) latest referendum survey.

An additional 43 per cent expect to see an increase over the coming year, with 19 per cent anticipating an upturn over the next three months and 26 per cent expecting an increase over the next six months.

Growth means taking on new staff.

The research found that 29 per cent of the small businesses surveyed expected to take on additional employees before September 2010.

So business confidence is on the up.

However, this optimism is offset by fears over accessing finance, which will be essential to keep small firms trading as the economy recovers and demand increases.

Reflecting widespread dissatisfaction with the banks and major lenders across the UK, an overwhelming 85 per cent of London’s business owners surveyed said that the terms and conditions of lending had worsened in 2009.

Just four per cent said they had improved.

In all, 72 per cent of respondents said the cost of finance had increased, with eight per cent believing it had fallen.

Further, 76 per cent of businesses in the capital reported seeing access to working capital worsen over the past year, with none reporting an improvement.

Similar figures were reported when small businesses in London were asked about accessing finance for growth, with none reporting an improvement and 77 per cent believing the situation had become worse.

In addition to highlighting these problems, the FPB asked members to suggest solutions.

The most popular among London’s SMEs [small and medium enterprises] was reducing the cost of credit, finding favour with 35 per cent.

Greater flexibility in lending arrangements to suit the changing needs of businesses came second, supported by 33 per cent of small businesses surveyed. Small businesses in London have sent a clear message that they are striving to be positive in the face of adversity.

The FPB is urging banks and other lenders to change the way they think about commercial customers in order to help them and usher in economic recovery.