ACS

ACS has welcomed the announcement of a range of measures designed to address the cash flow, credit and investment needs of small and medium sized businesses. The announced measures include;

• A £10bn Working Capital Scheme, securing up to £20bn of short term bank lending to companies with a turnover of up to £500m.
• An Enterprise Finance Guarantee Scheme, securing up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m.
• A £75m Capital for Enterprise Fund (£50m from Government augmented by £25m from the banks) to invest in small businesses which need equity.

ACS Chief Executive James Lowman said: “With access to financial support from both banks and suppliers being squeezed, retailers in financial difficulty are finding it increasingly difficult to gain credit. These announcements, if taken up by the banks, will come at a crucial time for many retailers. We are working with Government to make access to this finance as straightforward and widespread as possible.

“Cash flow is the biggest threat to small businesses during the recession. Many businesses that have had long term relationships with their banks and good financial histories are finding accessing finance increasingly difficult, with lending terms being changed at very short notice. Banks are becoming less willing to support cash flow or capital investment, and this is a threat to local shops.

“In addition, retailers are finding that suppliers are becoming more cautious and insurers for suppliers are less likely to insure credit.”

Mr Lowman continued: “Local shops play a vital role at the heart of communities across the country. Independent academic research of consumer needs shows that people want access to a local shop within five minutes walk of their home. To enable retailers to continue to play this central role to people’s access to food and sense of community, retailers must be able to access sufficient credit.”

ACS will be meeting with Ian Pearson Parliamentary Under-Secretary of State for the Department for Business, Enterprise and Regulatory Reform and Economic Secretary in the Treasury tomorrow and will continue to press the importance of these points.