• The Cost of Borrowing is too high

    Smallbusiness.co.uk is reporting that many small business owners are fed up with having to pay the banks high rates on their business borrowing.

    Businesses believe that bank-lending terms are exorbitant, according to research from finance provider Syscap.

    Some 90 per cent believe that loan arrangement fees are excessive, while 75 per cent feel that the lending margins on loans are too high.

    Philip White, chief executive of Syscap, says: ‘Businesses appreciate that risk needs to be priced into loans but feel that the cost of borrowing now far exceeds the risks.

    ‘While banks argue that the low level of lending is because there is less demand for funds, businesses are saying that the high cost of loans is what has depressed demand. Good businesses shouldn’t be punished for the past lending mistakes of the banks but that is what is happening.’

    Just 3 per cent of businesses believe that their ability to access bank lending has improved over the past year, while 38 per cent feel that it is now more difficult to secure bank funding than it was 12 months ago.

    Of the 80 respondents questioned, over a third (36 per cent) say they are delaying investment in their business because they are unable to secure funding. â¨

    Research from the British Chambers of Commerce found that access to finance has deteriorated in the last three months, with 33 per cent of companies reporting that funding availability has become more difficult, compared with 20 per cent in June.

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    Should not really come as a surprise, but it does go against the grain of what the government is telling us through the media.  What do you think?

  • UK rich in budding entrepreneurs

    Might seem hard to believe but despite all the recent bad news a significant proportion of people in the UK still say they want to start their own business.

    Of 2,121 adults surveyed, some 17 per cent want to launch a start-up, according to social enterprise organisation Enterprise UK. The body predicts that if one in ten of the respondents realised their ambition, it could create 1.1 million extra jobs.

    Carl Schramm, president of entrepreneurial charity the Kauffman Foundation, says: ‘Job creation is the number one issue facing families and policymakers during this economic recession, and this study shows that new businesses and entrepreneurs are the key factor in adding new jobs.’

    For those wanting to start a business, 49 per cent said the recession has had no impact on their decision to start-up. The number of people expressing a desire to launch an enterprise was only 12 per cent last year.

    In a recent speech, the former head of the Confederation of British Industry, Lord Digby Jones, claimed that small businesses alone would rescue the struggling UK economy.

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    Now this might not come as a surprise to most small business owners, because to them this is a way of life.  However lets hope that local and central government are quick to support these brave souls!