Small businesses have seen operating costs soar. While, at the same time, trade volume has decreased.
The results have been released by the Federation of Small Businesses (FSB), following a poll.
The FSB has sent the results to the Bank of England to demonstrate the devastating impact of the credit crunch.
The FSB wants the Monetary Policy Committee to cut interest rates.
According to latest FSB poll figures, most small businesses have seen operating costs increase and trade reduced in the last year.
When asked about increases in the cost of finance such as loans and overdrafts, 40% said they had seen increases in such facilities from the clearing banks.
A worrying 51% had seen an increase in their payment times from invoicing to full payment. This reflects the FSB’s concern that large companies are improving their cash flow on the back of their smaller suppliers.
“These startling figures show that the credit crunch is trickling through to the small business sector. In these tough times it is proving increasingly harder for small businesses to rely on their savings and that is why it is so important for banks to be more willing to lend money and for larger firms to settle invoices on time,” commented FSB national chairman John Wright.
“Small business survival is integral to the wellbeing of the British economy. That is why a cut in interest rates by the Bank of England is crucial.”
Leasing cars is one way to help ease cash flows, suggests Robert Wastell, managing director, CompareContractHire.com.
“Small businesses that don’t put cars through their books, can finance their vehicles through Personal Contract Hire,” suggested Wastell. “It could be the right answer in the current economic climate.”
Further information
- See Editor’s Blog Leasing can help ease cash flow
- You might also find useful our Advice Centre article What is a personal lease?
Latest FSB survey results show decrease in trade and increase in costs for small businesses
