Credit where it's due

"The Chancellor's announcement of billions in funds to provide loan guarantees for small businesses was the right thing to do: banks are increasingly wary of any exposure to risk, so small firms are missing out on finance." said Alan Hawkins, bira CEO after the Autumn Statement.

"However," he continued "It’s not loan finance that feeds the daily trading of independents, it’s the run of the mill overdraft. Over 60% of our members have had their overdrafts cut over the past year as the big banks rein in their exposure. Some have had them removed completely. Many others, even running limited companies, as opposed to sole traders or partnerships, have been persuaded to take on personal loans to provide the cash."

The trade association is concerned at the rising frequency of reports from members in the fashion trade in particular of suppliers are finding credit insurers withdrawing cover for small businesses. This threatens small and growing designers, brands, manufacturers and retailers.

Over 90% of shops fit the Micro-business mould of ten or fewer employees and small fashion retailers in this range have opened nearly twice as many shops this year as have closed, more than Arcadia, for example, is planning to close.

Alan Hawkins concluded: "The government desperately needs its growth agenda to work and it needs to make sure that credit is available where the money will actually produce that growth – at the grass roots of the economy. The Autumn Statement was all about creating confidence at a dangerous time and its success and the government's success will be judged on their ability to rebuild confidence. If credit insurers and banks erode the confidence that the Chancellor is trying to bolster they stand to undo the good work that he is trying to do."