small business bankruptcy

Many Small Businesses Face Bankruptcy by Christmas

The Federation of Small Businesses has reported that many firms have seen an increase in the cost of existing finance in the past 2 months. There is also an increasing number of firms that have had overdrafts withdrawn and the terms of their loans changed without notice.

The BBC is reporting that many small firms could be bankrupt by Christmas because of the financial crisis and that business organisations are worried that banks are not giving small firms the support they currently need.

David Frost from the British Chambers of Commerce has announced that he has serious concerns about the availability of credit, and the tightening of credit conditions for small businesses.

The Federation of Small Businesses has reported that many firms have seen an increase in the cost of existing finance in the past 2 months. There is also an increasing number of firms that have had overdrafts withdrawn and the terms of their loans changed without notice.

Business Secretary Lord Mandelson will chair later the first meeting of the small business forum, set up to address smaller firms’ financial concerns. One of the aims of this forum is to identify the concerns faced by both businesses and the banking industry and open up a dialogue to try to resolve these issues.

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