The Bank of England’s base rate cut to 5% was desperately needed, and small firms will give it a warm welcome as a harbinger of more cuts yet to come, according to the Federation of Small Businesses
National Chair Martin McTague said: “The base rate’s previous high plateau placed huge pressure on small firms, adding to a difficult operating environment which has been making it far too hard for small firms to grow. Today’s cut will not reverse or immediately stem the financial pain, but it signals that – finally – things are moving in the right direction.
“Small firms have been telling us for some time that it is hard for them to access affordable finance, an issue which is a significant barrier to growth – every finance application that is denied, or every loan request that isn’t submitted in the first place due to high interest rates or pessimism about the state of the lending market means a missed opportunity for investment and expansion.
“There is a place for the Government now to act decisively so small firms can be confident in borrowing money to invest – that means taking decisive action to end poor payment practices and closing the regulatory gap on personal guarantees which leaves so many entrepreneurs fearing for their homes when they take a risk.
“Unlocking economic growth is the Government’s stated goal, and ensuring that small businesses with big dreams for the future are able to get the funds they need to put their plans into action is a key component of stimulating the economy.”
