News Article - 22 May 2012
Category: Business

A new task force comprised of UK banks and the British Bankers' Association (BBA) will respond to mounting criticism over the lack of finance available to UK businesses. Its main goals will be to 'assess the demand for business finance' and 'make recommendations on those areas which relate to the liquidity and the funding of the banking system which are directly material to the provision of business finance.'

The task force will include an influential steering group made up of the CEOs from the six largest UK banks, and will work closely with the Treasury, Bank of England and the Department for Business, Innovation and Skills.

Recent reports suggest lending to small businesses has decreased significantly. According to a report from the Institute of Directors, one third of UK firms applying for credit in the first half of 2010 were rejected. Official statistics from the Bank of England suggest a drop in overall small business lending, with net lending to companies falling by £3.2bn in the first four months of 2010.

Many of the UK's larger banks also report that demand for new loans has dropped in the current month, even though overall the amount of money lent to small business owners has increased.

Complaints to the Financial Ombudsman concerning small business bank loans have risen considerably, with 496 complaints made in the year to March 31^st, compared with 226 in the previous 12 months. This equates to a 119% increase. Overall, complaints against all financial services providers have risen to 4,656 in the same period, a 43% yearly increase. This equals a faster increase than complaints by consumers, which rose by 27% over the year to 158,356.

The establishment of a dedicated taskforce will be welcome news to SMEs who struggled to receive financing during the economic downturn and continue to experience cashflow issues. Firms must acknowledge that funding is not as easy to come by as in the pre-recession climate and must address internal inefficiencies to ensure sufficient liquidity is available during tougher times.

Access accounting software can help companies more efficiently handle cashflow by promoting full financial visibility throughout the organisation. Work in Progress Analysis, part of the FocalPoint package, allows firms to more quickly invoice clients for billable work at any stage of the project process, helping to ensure cashflow does not dry up if outgoings increase acutely.

For more information, please call Access on 0845 345 3300.

Article keywords: Business news, accounting software, enterprise softwware, business solutions, industry news, bank, business finance, bank of england, department for business

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