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Banks claim lending to small businesses has risen 10%

Banks lending to small firms has increased by 10% during the 12 months to September 2008 to £44bn, according to the British Bankers Association (BBA). The BBA claims that lending to small firms has risen to a figure just under £45bn. The association added that lending increased by £1bn in the third quarter of the year and that the amount of money being borrowed had risen by 4% to over £9bn. These figures are released days before Alistair Darling's pre-budget report, which is expected to impose tough new rules on financial institutions to encourage them to lend to small companies. Banks have been criticised for failing to lend to small firms, even after receiving a £37bn bailout by the government.
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Annual pension levies could be tied to risk of investment

The Pensions Protection Fund (PPF) has announced plans to tie annual levies more closely into the risk that each scheme poses. This would be the first time that pension payments have been linked into the risk of a particular strategy. "It is not about telling trustees how to invest, and our economic analysis suggests that there are no economic incentives [in the plan] to changing strategy, said Partha Dasgupta, PPF chief executive. The average shortfall of pension schemes in deficit rose from £37bn in October 2007 to £122bn a year later. The PPF argue that their proposal will reduce the year-to-year volatility of pension schemes. It is not expected that the new levy system will be implemented before the 2011-2012 financial year.
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October high street sales better than expected

High street sales fell by far less than had been expected in October, raising hopes that the Christmas season may not be as bad as many retailers have feared. Figures from the Office for National Statistics revealed there was a 0.1% fall in total sales; far less than the 0.9% drop that many analysts had predicted.
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Small firm liability insurance set to rise

he cost to businesses of obtaining liability cover is set to rise due to underwriters increasing premiums. The insurance group Zurich has said that is will lift premiums by at least 6% to a total of 8%, in line with claims inflation. "The deteriorating economic climate will reduce investment returns for everybody, including insurers, and this has been factored into pricing," said Graham Prior of Zurich. New premium increases are likely to raise fears of the liability crisis of 2002 when some premiums increased by more than ten times their standard amount, leaving some small businesses unable to afford Employer's Liability insurance.
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Small firms should ‘be able to pay tax more flexibly’

The number of unpaid tax bills increased 20% last year last year, according to official figures released by the National Audit Office. The number of tax debts in the UK rose last year to 15.8m, sparking fears that many small firms will struggle to pay the tax they owe. The Chartered Institute of Taxation (CIOT) has called for small businesses to be allowed to pay tax owed on a more flexible timescale. The CIOT believe small businesses that would not have experienced financial difficulties in normal economic circumstances should be allowed extended time to pay tax to HM Revenue & Customs (HMRC). "What we have seen in the last month has been quite exceptional. No small business, even in a worst-case scenario, would have planned for such an event," said Peter Fanning, CIOT chief executive. "There are various things that can be done to help businesses, such as wider publicity of HMRC's ‘Time to Pay' facilities, and allowing them to pay the tax they owe at a time when they are able."
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House sales increase for second month in succession

The number of houses sold in the UK increased for the second month in a row in October, according to figures from the National Association of Estate Agents (NAEA). The study showed that agencies sold an average of seven properties a month in October, compared to six the month before.
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Bank of England hints at further rate cuts

The Bank of England has delivered its clearest hint yet that interest rates will continue to fall over the coming months. The minutes of the meeting of the recent Monetary Policy Committee revealed that the bank had considered an even bigger cut than the recent 1.5% drop, but opted against it for fear of sparking panic and a run on the pound.
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New £25m fund for female entrepreneurs launched

The business minister, Baroness Shriti Vadera has launched a fund designed to encourage women entrepreneurs at the Everywoman conference in London. The Aspire fund will be backed by £25m provided equally by the government and private sector investment. In order to avoid discrimination laws being breached the Department for Business will allow male owned companies to apply for funding of between £100,000 and £2m. However, as part of the criteria male owned companies will have to invest in businesses that are at least 30% owned by women. “There are 20% more people in enterprise in the US than in Britain and the majority of that gap is made up of women. Getting more women entrepreneurs is an economic issue, not just an equality one,” said Shriti Vadera. “If we matched the US levels of women’s enterprise there would be 900,000 new UK businesses.”
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Credit insurance withdrawn for 12,000 UK firms

Over 12,000 UK businesses, the majority of which are small and medium sized, have seen their insurance cover withdrawn as the credit crunch affects the country's supply lines. Atradius, the UK's largest credit insurer has confirmed that it is retracting its insurance offered to the suppliers of these companies against non-payment on bills for goods and credit. Without credit insurance suppliers are less likely to provide goods to firms, as they have no safety net if they do not receive payment. Experts have warned that the withdrawal of credit insurance is likely to lead to an increasing amount of firms becoming insolvent.
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'Up to 60,000’ UK businesses at risk of going bust in 2009

Nearly 60,000 British businesses could go bust next year, with a raft of insolvencies particularly affecting small and medium sized businesses, according to recruitment firm Begbies Traynor. Around 20,000 job losses were announced last week by firms including BT, Virgin media and bank RBS. Begbiw Taylor’s latest insolvency monitor reveals that over 57,000 firms are experiencing significant financial problems, with just under 2,000 on its critical list – meaning there is a strong possibility they will go bust in less than six months. This is a 7% increases from this time last year. SMEs account around 90% of the firms in financial difficulties and experts have warned that a large proportion of small businesses could soon cease trading. “I can see a tsunami of insolvencies among SMES in the New Year unless firms can conserve cash now,” said Nick Hood, senior partner at Begbies Traynor.
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