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MP Backs calls for banks to restore credit to small businesses
November 18, 2008 3:00 PM
Dunfermline and West Fife MP Willie Rennie is backing calls from Westminster for high street banks to restore credit to small businesses struggling to survive the economic downturn.
Concerns have been raised that some high street banks - including some that are part-nationalised - have withdrawn lines of credit to small businesses, precisely at a time when they need the most support.
Mr Rennie is concerned that a number of constituents, both individuals and owners of small businesses are being penalised by the banks. A survey carried out last week by the Scottish Federation of Small Businesses found that 27% of firms have faced rises in the cost of existing finance, loans or overdrafts in the past two months. Willie has signed a cross-party motion at Westminster calling for banks to restore crucial credit lines to small businesses
Commenting Willie said:
"The Government must ensure that the billions of taxpayers' money they have promised to bail out the banks is used to support small businesses which are the lifeblood of our local economy.
"Platitudes are meaningless to small businesses facing hikes in interest or cancellation of debt facilities. The Government must, as a matter of urgency, sign an agreement with the banks specifying the rules which they must follow. The rules must prevent banks from withdrawing facilities on demand, and must include clear guidelines for the renewal of facilities which come to an end. Levels of interest margins and fees must remain at current levels, and there must be a clear and simple appeal mechanism to prevent the banks from needlessly withdrawing credit."
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