So far, it doesn’t look good. The Forum of Private Business (FPB) predicts that 200,000 companies could go under during this recession, many of them because bank financing is not being made available quickly enough.
Although Mandelson has set up a special forum of banks and business groups to keep tabs on the situation and is pressing banking bosses to free up lending – it doesn’t look like they’re listening.
In the Sunday Times yesterday, Patrick Nelson – the entrepreneur behind Nottingham-based website developer Underdesign – complained that Barclays had dramatically slashed his overdraft: “If we survive the recession, it won’t be thanks to Barclays, it will be in spite of it.”
The FPB says it will make sure Mandelson’s new forum doesn’t become a "talking shop". “As the economic downturn deepens, supporting small businesses by improving access to finance from the banks is increasingly important to the health of the UK’s economy,” comments the FPB’s research manager, Tom Parry.
“Anecdotal evidence suggests that the banks are not yet listening to the needs of small businesses, and are beginning to tighten their credit facilities. This must be stopped before it becomes a trend.”
Let’s face it: Mandelson isn’t exactly the most trustworthy man in the world, given the ongoing shenanigans over his relationship with Russian billionaire Oleg Deripaska.
Has lending dried up? Have borrowing charges been raised to unaffordable levels? Has your bank imposed ridiculous terms? Let us know! Add your comments below.
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