Business leaders have welcomed the loan guarantee scheme which was introduced by the government, but more could have been done to aid small businesses in the UK, according to some. The chief executive of the Forum for Private Business, Phil Orford observed that incentives and help has been provided for medium sized businesses, but micro businesses have received minimal help. According to Orford, more could have been done.
Orford went on to point out that micro businesses make up the majority of small companies in the UK, and their priority is to source affordable finance, removing barriers to cheap borrowing. Although the Chancellor is progressing in the right direction, more could have been done for micro companies.
The national loan guarantee scheme will lower the cost of bank loans for companies that have a turnover below £50 million. The government will act as guarantor so that banks can make up to £20 billion of cheap funding available to smaller companies. Mid-sized companies will also be able to raise finance from sources other than banks through the Business Finance Partnership, with £1 billion available initially. A further six months will be given from 1st October 2012 as an extension to the small business rate relief holiday. As business rates bills will increase 2012-13 due to the uprating of Retail Price Index, up to 60 percent of the increase can be deferred, to be paid back over the next two years. The managing director of Facts & Figures Financial Planners Ltd, Simon Webster said:
“At the end of the day what all of us in business need is for people to start spending more money the general term for that is growth.”
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