WA1

Finance schemes for small firms 'need greater flexibility'

As small business owners increasingly choose to use credit cards in preference to bank loans, the Federation of Small Businesses is calling for more flexibility in the forms of finance that are available to small firms.

The number of small business owners using bank loans has fallen from 44% to 30% in the last two years, while the number using credit cards has increased from 18% to 25%.

The FSB argues that this highlights the fact that flexibility, speed, and ease of use are primary concerns for the business owner.

The business organisation says the current review of the Government's Small Firms Loan Guarantee (SFLG) scheme presents the ideal opportunity to increase flexibility.

Under the current system, businesses can wait for up to six months before receiving notification of whether their applications have been approved.

Neil Hamper, financial affairs chairman at the FSB, said, 'The Government must take a step back from the Small Firms Loan Guarantee scheme but also continue to encourage banks to offer more loans.

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