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being in the know

As we enter into yet another month of economic doom and gloom the results of the latest British Chambers of Commerce (BCC) monthly survey shows that businesses still remain largely unaware of the Government's new flagship Enterprise Finance Guarantee scheme.

Of the 250 companies across the UK which were surveyed a fairly staggering 90 per cent said they were unaware that their bank offered or even utilised the scheme, nor were they aware that their bank offered or utilised European Investment Bank funds or the Working Capital Scheme.

Only one business of the 250 had a loan offered to them based on the Enterprise Finance Guarantee.
There's undoubtedly been a huge amount of confusion - not to mention irritation and anger - about the whole banking system in recent months, and we've had a fair amount of anecdotal evidence from businesses which indicates that in many cases the right hand at the banks don't know what the left hand is doing and that neither of them are really too sure about what's going on up top in HQ.

This lack of knowledge of what's available and possible is clearly a message which some banks at least are taking on board and we're increasingly seeing press releases and ads from some of the more pro-active banks specifically highlighting just what they can do for business, particularly businesses in the SME sector.

But much more needs to be done and soon to raise awareness of schemes, it will be business which will drive the UK out of recession and banks must support business through this extremely difficult time.

More than half of the businesses surveyed which sought a bank loan had either failed to secure one or did not receive a loan which met their financial needs.

The issue of onerously high set up fees and other charges also featured in the survey and of the businesses which had an overdraft - representing 60% of the sample - half of those had seen an increase associated with their overdraft facility over the past six months. The survey also found that 13% of businesses said that there had been a reduction in the amount of credit their bank was willing to lend them.

Other key issues also continue to be a burden to business and 61% of those surveyed stated that the late payment of invoices is affecting their cash-flow position.

In commenting on the survey, David Frost, the Director General of the BCC called on the Government to take action.

"The Government needs to address the growing pressures on cash-flow within businesses, even beyond relationships with banks," he said. "This means scrapping the planned rise in National Insurance contributions, calling time on harmful extra regulation and freezing the national minimum wage."

The BCC will as always feed these results to the policy makers and decision makers as part of the ongoing commitment which the Chamber network has towards raising the concerns of our members and the wider business community at the very highest levels.
It is a commitment which is also uppermost at local level and at the time of writing, AGCC had just completed a day of briefing meetings with MPs and MSPs from all parties which updated them on the work which the Chamber is doing generally in terms of policy work for our members but which had specific reference and discussion relating to banking issues.

It's an approach which has clearly positioned the Chamber network as one of the leading authorities on business opinion.

Government departments are increasingly contacting the British Chambers network about issues relating to the downturn. Two recent issues which have arisen are:

The Treasury is trying to understand the impact of the currency depreciation on individual businesses. Historically, effects of a downturn in export markets have dominated the impact of weak currency. What the Treasury want to know is how long it would take for a decrease in the value of the pound (if demand hadn't decreased in export markets) to benefit exporters. And, if there is a lag, what determines it (e.g. pre-agreed contracts and prices)? If you have any anecdotal evidence on this please pass it to me at kate.yuill@agcc.co.uk for inclusion in the BCC policy roundup.

The Prompt Payment Code was launched by BERR in December. Signatories of the Code commit to paying suppliers on time and within clearly defined terms. The BCC has signed up to the code, as have another couple of Chambers. If you feel that you can sign up to the Code or that you want further information, please visit the following web address: http://www.promptpaymentcode.org.uk/

Policy matters at the Chamber. Much of our lobbying is unseen by business but we assure you that in these difficult times we are carrying a strong message to the Government and policy makers about the needs of business.