The Federation of Small Businesses (FSB) has called for the government to introduce further support measures and for banks to “step up” to ensure small businesses can access the financing they need.
The organisation said it was “particularly concerned” by the number of small businesses that were struggling to access government-backed Bounce Back Loans (BBLs) because they were unable to open accounts with accredited lenders.
“Access to finance for many small businesses in the capital is now business critical,” said FSB London policy chair Rowena Howie, adding that lenders needed to “urgently” take action as “livelihoods depend on it”.
City A.M. has previously revealed that many small businesses had been left unable to access BBLs after banks closed to new applicants early. Many of the major lenders require firms to have business accounts with them in order to access the loans.
Of the 28 lenders accredited under the scheme, just one is still open to applications from new customers, despite the chancellor extending applications for the scheme to 30 November.
“These institutions who are not supporting viable, honest and credit worthy businesses… need to urgently hear the cries of these firms and provide vital support,” said Howie.
The FSB also urged the government to introduce further coronavirus support measures for businesses that have not yet received any income support during the coronavirus crisis, and to reduce the cost of hiring and “further alleviate the business rates burden”.
The FSB’s call comes as new figures showed that business confidence remains low among small firms in London, with companies in the capital most likely to report a decline in revenue in the last 3 months compared to other regions in the UK.
Some 63 per cent of London-based small firms reported a drop in revenue for the quarter.
The organisation’s small business confidence reading for the capital remained unchanged at -26 for the third quarter. However London firms reported a higher level of confidence for the coming quarter than other English regions.
A record 30 per cent of small businesses in London said they had reduced headcount since the previous quarter, but the proportion of firms expecting to make redundancies in the coming quarter fell to 16 per cent.
“It is confidence and certainty that businesses need at this time, particularly for businesses most in need of support in the hospitality, retail and tourism related sectors,” said Howie.
“A lot of small businesses have shelled out thousands to make their premises safe at a time when they had little or no revenue coming in only to be told to close,” she continued.
Alongside continued uncertainty related to the Covid-19 pandemic and access to emergency financing, the FSB said that uncertainty over the TfL bailout and whether the UK would reach a post-Brexit trade agreement with the EU was also having a detrimental effect on London’s small business.
“Securing a swift and positive TfL bailout and EU deal will provide a fillip for many small businesses at what has been an extremely difficult time,” Howie said.