'Restore relationship' between banks and SMEs

16/08/2010

The relationship between banks and small businesses has to be restored, according to the Federation of Small Businesses (FSB).

"It's much more than access to finance, it's about having a relationship that's based on trust with a person in the bank so that you have got the confidence to go out there and bid for contracts," said Andrew Cave, head of policy at the FSB.

Mr Cave was commenting on the issues surrounding lending to small firms.

The British Bankers' Association recently announced it would be setting up a taskforce to identify barriers to businesses securing finance.

Mr Cave said it would be crucial to the economic recovery for banks and small firms to develop a more personal relationship.

"Coming out of the recession there isn't that understanding and that relationship that will take the level of confidence through to taking that risk.

"That's where we need to focus on. Instead of banging on to the banks about access to finance, what we need them to do is return to that older model of actually helping and working with small businesses."

Posted by Sam Williams