Banks must be flexible for start-ups
Oct 23 2008
“Banks must support SMES”
Small businesses are calling for government help to reduce interest hikes on overdraft charges, following a meeting between ministers and bank chiefs.
Mark Esslemont, founder of clothing and accessories shop Esslemont, tells Smallbusiness.co.uk he first felt the pinch when his bank increased overdraft charges from two per cent to four per cent in September.
He says: ‘From a business point of view, there needs to be a lot more flexibility between banks and small businesses. I hope the government meeting will help bring this move about.’
Chancellor Alistair Darling and business secretary Peter Mandelson are to urge the chief executives of leading banks to increase small business lending.
In a select committee Mandelson told MPs that after the government bail out, banks should lend the same level of credit to small businesses as last year of £53 billion.
Phil Orford, chief executive of the Forum of private Business, says he welcomes the government’s plan to meet directly with the banks.
He adds: Tax payers’ money should be used for the benefit of small firms. In addition, the cost of lending should be restored to the 2007 levels, which was three per cent above the base rate for loans of a fixed term.’