4R Blog

RSS Feed

FSB: Interest rates on loans are too high

Date Added: 29/02/2012  

The current business lending situation has been criticised by the Federation of Small Businesses (FSB), which has claimed interest rates on loans are "cripplingly high".

According to the body, a fifth of companies based in London have been ordered to pay back the amount they have borrowed at a rate of more than 15 per cent.

This is despite the fact the Bank of England's Monetary Policy Committee has held the base rate of interest at a record low for the UK of 0.5 per cent for the last three years.

Nationally, just seven per cent of firms have been charged at interest rates of more than 15 per cent, it was highlighted by the organisation.

Steve Warwick, the FSB’s regional chairman for London, told London Loves Business that companies in the capital are facing mounting financial pressure at the present time, which may mean they need to take business debt advice to avoid being served with a winding up order.

He said: "It is easy to forget that the Bank of England interest base rate still stands at a historically low level of 0.5 per cent. It is no surprise that three in ten businesses in London are dipping into their own savings and inheritance to finance their business activities."

Matthew Jaffa, FSB’s London senior development manager, is therefore calling for the government to put in place a number of measures in order to improve the business lending situation for small firms based in the capital city, including promoting alternative finance options.

Peer-to-peer lending, business angels, mentoring support and community finance agencies were among the suggestions made by the FSB representative.

Santander recently announced it has appointed 15 new local business managers in a bid to help firms to secure the finance they need.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Miles Pritchard

Get the Help You Deserve

0800 90 20 123

Urgent Help Call 24/7

020 7183 2606

We'll Call You

Request a Callback