Things are looking up for small businesses, despite the economy remaining at a low. The Guardian recently reported that credit is still available from banks, despite the Federation of Small Businesses insisting there is none available. Lenders are arguing that demand is low; money is available if small businesses want to apply for it. Simple economics state that to invest and grow you need to borrow, and for small businesses struggling to stay afloat in today’s economic climate, borrowing may be their only option. The Bank of England has reported a significant drop in credit demand this year, which may or may not be because small businesses are looking elsewhere for their funding. But if additional credit is needed for your small business, look in to credit available from banks, you might be surprised.
Another welcome surprise came this week as the Government bans excessive credit card charges. Great news for the consumer, especially those flying abroad as air passengers have incurred up to £350million in surcharges on flights in 2010 alone. While some types of business may remain exempt, the ban – due to pass next year – was brought forward after concerns were raised by consumer groups that customers were being overcharged. Under the new rules, businesses will only be able to charge a small amount to cover the cost of processing the payment, so credit card costs should go down. However, if you’re a small business, or new business launched recently, you will remain exempt from the ban until June 2014, great news for any small business required to take credit card payments. With the Government looking in to ways to support and generate local growth, the focus is on building small businesses across the UK. The recent study by The RSA Group suggested economic recovery would require an influx of approximately 300,000 small and medium sized businesses to underpin it. New business, it seems, may hold the key.