Corporate mediator tops wish list of small firms

Apr 21 2009 by Karen Dent, The Journal

A CORPORATE mediator to rebuild relationships bet- ween small businesses and the banks is on the Federation of Small Businesses' wish list for tomorrow's Budget.

The FSB said more than 70% of members quizzed for a pre-Budget poll supported the idea of an independent mediator to broker agreements on issues currently causing problems, such as the difficulty faced by many small firms in securing loans. Both France and Belgium already have mediators and have shown how such a role works in practice.

Although six out of 10 small firms said they had seen no difference in their bank’s behaviour since the economic downturn began, a third now consider their bank to be less helpful than it was before the recession.

The FSB said an official mediator could act as a first point of contact for small enterprises having difficulties accessing loans or overdrafts and help to settle cases where viable businesses were unable to obtain finance. In addition, the postholder could report trends to the Government.

North East businessman and FSB chairman John Wright said: “It is high time the Government took some serious action and built bridges between the banks and the small businesses which keep our economy moving.

“The future health of our economy depends on mending the relationship between small business and the banks; small firms and entrepreneurs need confidence to take the risks to innovate, grow and create jobs and take us out of the recession.

“In order to do this, they need to regain their faith in the banking system. Small businesses have identified a corporate mediator, one which works similarly to those in France and Belgium, as key to this revival.”

Meanwhile, the Forum of Private Business (FPB) is calling on Chancellor Alistair Darling to use his Budget to boost business and consumer confidence.

The results from the lobby group’s latest Economic Downturn Panel, launched last November, suggested a slight improvement in economic conditions, with more than a quarter experiencing an increase in demand for their goods and services.

FPB chief executive Phil Orford said: “In order to capitalise on these positive signs, the Government must launch a long-term, strategic plan in the forthcoming Budget; one that helps small businesses survive and grow, and become a catalyst to broader economic prosperity.”

However, a quarter of those surveyed believed support from the Government had deteriorated, while 41% had found a further decline in bank support since the last FPB survey in January.