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Business lending steps welcomed by MP

Date Added: 05/12/2011  

Business lending proposals recently revealed by the coalition government have been welcomed by an MP based in the north-east of England.

Hexham's Guy Opperman explained the measures outlined by chancellor George Osborne in his Autumn Statement should provide a boost to smaller companies, BBC News reports.

He added business lending is one of the issues often raised by his constituents, so he is pleased to see the credit easing plan brought in by the Conservative-Liberal Democrat alliance.

"The chancellor is clear things are tough and I think the government is right to focus on using every resource at their disposal to build growth, without putting our economy at risk with more debt and more borrowing," Mr Opperman said.

He added the measures revealed by the chancellor in parliament last week should help lead to growth in north-east companies in the coming weeks and months.

But Terry Jacques of Millennium Hardwoods suggested his firm could be in need of business debt advice to avoid the threat of a winding up order in the near future.

He told the news provider how the organisation is struggling at the present time and needs to find funding this month in order to keep it going over the Christmas and New Year period.

"It sounds great from the government but we have heard it all in the past and it's just not happening. I have been in business for 32 years and I am more concerned now than I have ever been," Mr Jacques said, explaining finance is unavailable to keep his company alive.

North East Chamber of Commerce chief executive James Ramsbotham also hailed the need for business lending to be improved between banks and Britain's small firms.

Speaking to the news provider, he noted more needs to be done to overhaul the current situation, highlighting the fact that a lot of companies are not bothering to apply for loans at the moment as they assume they will be turned down for the financing from the bank.

"From previous recessions, we know that most business failures actually happen during the upturn, not the downturn," said Mr Ramsbotham, who explained this is because firms will need access to money in order to grow, which would then boost the UK's economic recovery.

Mr Jacques added he has been trying to access business lending for the last eight months as he attempts to expand his business, creating new jobs in the process.

His firm has recently started making a type of flooring previously only available in China, but he is not able to produce enough of the material as a result of the lack of financing from the banks.

"At the moment we are stuck between a rock and a hard place," Mr Jacques noted, explaining he believed the Enterprise Finance Guarantee scheme would be an ideal way for him to access funding, but this has not proved to be the case despite lengthy negotiations with lenders.

This comes shortly after analysis by Funding Circle revealed that the difference to the bottom line of a company's balance sheet as a result of the chancellor's Autumn Statement is expected to be negligible.

James Meekings, co-founder and director of the organisation, explained there will only be a saving of £34 a month for firms borrowing £75,000 over the course of a three-year period.

He highlighted the fact that for many small companies operating in the UK - that may be under threat from a winding up order - this will not be deemed to be a "significant" amount.

Mr Meekings claims business owners want access to quick, low cost, convenient finance with a transparent fee and charging structure, which is not being provided by banks on the high street.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Michael Beam 

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