According to the Federation of Small Businesses, the Chancellor should be wary of excluding the smallest businesses from his plans for credit easing, announced in October this year. Credit easing will be introduced to make it easier for Small and Medium Enterprise to gain access to funding.

Lobby groups are concerned that the smallest businesses will be forgotten, as costs and management will be too high. The FSB are calling for measures to be put in place to allow small businesses to have access to funding of less than £25,000. According to the FSB, this is:

“where the majority of demand lies and where firms have had particular problems raising finance.”

There are government lending schemes already in place, which the FSB believe could be enhanced to help small businesses. Schemes include the Enterprise Finance Guarantee, which involves a bank debt being guaranteed by the government, and the Exports Credit Guarantee Department. Although the national chairman of FSB, John Walker believes that both small and medium businesses should benefit, Conservative MP, Sam Gyimah, who suggested the initiative to the Treasury, said he intended to target medium size established companies.

The chief executive of the London Stock Exchange, Xavier Rolet said that investing in medium size companies would be more beneficial for employment growth. He believes the businesses which have between 10 and 250 employees will have the greatest impact on the economy. Plans for credit easing will be announced before the Chancellor’s autumn statement at the end of November.

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