smallbusiness.co.uk: Helping your business think big

The upcoming Budget must tackle the 'double whammy' of poor cashflow and tight access to finance which is hitting small businesses.

According to the Federation of Small Businesses (FSB), this year will see the 'most crucial Budget in decades' which will need to deal with problems caused by the credit drought.

The group calls for a corporate mediator to be established to work as an autonomous intermediary between the banks and their business customers.

In addition, the FSB recommends that a Post Bank is set up, which would be run out of the Post Office network and act as an alternative to conventional lenders.

The organisation also suggests ways to boost cashflow, such as automatic rate relief for small firms and an increase in the income tax and national insurance contribution thresholds.

John Wright, FSB chairman, comments: 'The government must take decisive action to inject life into the economy and resolve the big problems faced by small businesses: the double whammy of irregular cashflow and a lack of finance from the banks.'

The Confederation of British Industry recently published a package of suggestions for the Budget, which would allow it to support employment, investment and competitiveness.

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