Nuneaton MP Marcus Jones has appealed to the banks to treat lending to small businesses more sympathetically as they play such a critical part in growing the economy and helping restore the nation’s finances.
Speaking earlier today during a House of Commons debate on the ‘Financing of Small Businesses’ Mr Jones said:
“The financing of small firms is one of the most important issues facing our economy.
“It is imperative that we look for sustainable economic growth to enable us to re-balance our economy and pay down the debt we have inherited after 13 years of the previous Labour Government.
“In order to achieve this goal we have to ensure that small businesses grow and prosper, and new jobs are created.”
Mr Jones spoke about how creating new jobs was vital for his own constituency of Nuneaton.
He said that new employment prospects were desperately needed across the whole of the West Midlands region which had suffered particularly badly as a result of the recession.
In referring to the key role that small businesses play in the economy the MP went on to say:
“We need to remind ourselves that Small and Medium Sized Businesses (SMEs) make up over 59% of private sector employment, account for over 50% of private sector turnover and employ an estimated 13.7 million people.”
Mr Jones pointed out that two of the most important factors contributing towards the prospering of small firms are cash flow and access to credit.
But the Nuneaton MP believes there is evidence which shows that banks can be unwilling to give credit facilities even to longstanding businesses with strong trading records unless the business owner pledges his or her own domestic home as security.
Marcus Jones was also highly critical of banks reviewing firms’ credit facilities at short notice, varying terms of their overdrafts without warning and dramatically increasing loan interest rates.
The MP pointed to 2nd and 3rd tier manufacturers who were coming under increasing pressure to hold stock over longer periods and who are being told to extend their credit terms.
He went on to appeal to the Government to see what it could do to encourage better payment terms to small businesses.