The Federation of Small Businesses (FSB) has today called on the government to cap credit card interest rates in an attempt to help businesses already suffering in the recession.
The FSB"s own figures suggest that at least a quarter of all UK SMEs are now being financed with a credit card, and high interest rates are exacerbating cashflow problems. The discrepancy between the Bank of England base rate and the average credit card rate has been questioned by small business leaders, who maintain that a reduction in interest rates would also encourage customers to begin spending again.
While the government is unlikely to agree to any such cap, they have been keen to stress the measures being taken to help small businesses. Amongst these is the new £1bn loan guarantee scheme, which will guarantee lending of up to £1 million to small businesses. However, the loans will be provided by commercial lenders, and will therefore be offered only to firms that are deemed a viable commercial prospect.
