'Barriers to business' survey slams banks and regulations

Banks are seen as one of the biggest barriers to small firms, according to a survey by the Federation of Small Businesses (FSB).

In the poll of 8,700 FSB members for the report 'Putting the Economy back on Track: Business Support & Finance', respondents named increased regulation, the challenge of building customer base and pressure on working capital and cash flow as the main obstacles preventing them meeting their goals.

Respondents in the hotel and restaurant sector, the motor trade, financial services and in transport and communication were most concerned about increased regulation.

A lack of working capital and trouble building the customer base were consistently reported as problems across sectors, while legislation was reported to be having the most detrimental effect on the smallest firms - those employing four or less employees.

The FSB's national chairman, John Wright, singled out the banks for particular criticism: "We would like to see the first meeting of the new Small Business Finance Forum next Tuesday to call branch managers to account to ensure that they do more to show how they can support small businesses.

"The first step to help this crucial sector could be to immediately pass on the recent cut in interest rates which could save small businesses £750 million and help get the economy back on track."