Unblocking the credit market

Businesses struggle to access credit despite the governments multi-billion package

According to an association of accounting firms, SMEs are still struggling to access credit despite business secretary Lord Mandelson’s multi-billion package to unblock the credit market.

The government’s enterprise finance guarantee, will underwrite 75 per cent of a bank loan made to companies with a turnover of up to £25m.

But Kevin Dickens, president of the UK200 Group, which represents 120 UK accounting firms, said some high street banks were unaware how to apply for the scheme.

He commented that banks had told him the packages will not be available until the end of February. This could result in businesses going bust and make it harder for accountants to help clients get credit.

‘The infrastructure is lacking behind the grandiose statements. I have been trying to work with banks to find out the details of the scheme,’ he said.

A spokesman for the Department for Business, Enterprise & Regulatory Reform commented that the money guaranteed by the measures had been available since 14 January, the day of the announcement.
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