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Helping small and medium sized businesses through the economic slow down

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Released 21 Oct 2008

A package of further support to help small and medium sized businesses to bear the impact of the current global economic challenges is announced today by the Government.

Small and medium sized businesses employ about 13.5m people and are essential for the livelihoods of hard working families. Today's cross-Government package focuses on the things small and medium sized enterprises (SMEs) have identified as top priorities - cash flow, access to finance and training for staff.

The Government will:

* Build on its commitment to pay firms within 10 days by working with NHS trusts in England, local authorities and other public sector employers in England to seek opportunities to extend the payment target. Regional Development Agencies in England, which spend around 750m per year with suppliers, have today signed up to this target.

* Offer free "Health Checks" in England for businesses through its Business Link support service to help identify problems early and to survive in the current financial climate.

* Prioritise training for SMEs in England under its Train to Gain initiative to ensure employees have the skills and business knowledge they need.

* Provide financial information, produced by the Institute of Credit Management, to help UK businesses to maintain cash flow, secure finance and limit problems caused by late or non-payment.

Secretary of State for Business Peter Mandelson said: "We are on the side of small and medium sized businesses and understand that they are facing tough times. The Government has taken steps to ensure that banks can start lending to them again.

"But we're determined to do more. Businesses tell us they need access to cash flow. That's why central Government has committed to paying businesses within 10 days - and we're urgently speaking to the wider public sector to extend this commitment. We want everyone in the supply chain to pay their bills more quickly.

"Big businesses have accountants and business advisers. Small businesses, with fewer employees and limited resources, often lack such professional help and advice. These measures we're announcing today offer them new support. They're not on their own.

"We want to help smaller businesses to plan for the difficult times ahead. We want to ensure that they are healthy enough to survive and come out strongly at the other side."

Skills Secretary John Denham said

"We are overhauling the training system to make sure small businesses can get help with training their staff with the very minimum of bureaucracy.

"We know that firms which invest in skills do better than those that don't, which is why we will be urging small businesses to take up this offer from Government."

The free business Health Checks aim to provide personalised support and confidential advice for all businesses, regardless of their size or sector, on:

  • Maximising cash flow
  • Marketing
  • And Business Planning

Qualified experts will help firms draw-up business action plans designed to shore up their businesses and avoid the potential pitfalls of the economic slowdown. Business Link will also provide a follow-on and monitoring service to ensure the plan is working for them.

In addition, Business Link users will be given free guidance, produced by the Institute of Credit Management, to give businesses expert financial information to help safe guard their businesses. The guidance will cover:

  • Effective invoice chasing
  • Debt management
  • Credit Insurance

Notes

1. Business Link is the information, advice and support service for businesses, funded by the Government. For more details go to http://www.businesslink.gov.u k/businesshelp or call the National Help Line 0845 600 9 006.

2. In addition, we will help businesses improve cash flow by identifying cost savings through increasing energy efficiency. Businesses can save significant sums through simple measures to use energy more efficiently. The average annual saving for small companies is around 250, with savings for larger employers rising to 5,000 or more a year. Practical advice on how business can save energy is available at http://www.businesslink.gov.u k/cutfuelbills

3. As a condition of the recapitalisation of the banks, the government is requiring banks to maintain the availability and active marketing of lending to SMEs at 2007 levels. The government has brokered contact between the European Investment Bank (EIB) and UK banks to ensure that the 24 billion facility announced by EIB over four years is made available for immediate access in the UK. The four largest UK banks have now signalled their initial interest to negotiate loans totalling about 1bn.

4. With regards to prompt payments, the Government examined payment data from ten Departments with expenditure totalling 66billion. A total of 58billion (88%) of payments being made within ten days.

5. In March the Government's Enterprise Strategy set out a renewed vision for making the UK the most enterprising economy in the world, with particular focus on the needs of small business. The Government also recently increased the Small Firms Loan Guarantee by 20 per cent for 2008-09 and increased investment in the Leadership and Management Programme for SMEs from 4m to 30m per year.


About the Author

Crown Copyright. Material taken from the BERR- Department for Business, Enterprise and Regulatory Reform replacing DTI - Department for Trade and Industry. Reproduced under the terms and conditions of the Click-Use Licence.


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Article Published/Sorted/Amended on Scopulus 2008-10-22 13:37:17 in Business Articles

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