Business groups welcome SME crisis measures

Crisis measures to ease funding for small businesses have been warmly welcomed by the sector.

In his pre-Budget report on Monday, the chancellor, Alistair Darling, outlined a number of major initiatives to free-up lending and reduce financial pressure on smaller firms.

Small businesses are to be allowed to spread their tax payments, and the planned rise in Corporation Tax has been postponed. The threshold for rate relief on empty properties has been temporarily increased.

Among a range of measures to guarantee lending, is the temporary Small Business Finance Scheme, which will make up to £1 billion available in a similar way to that suggested by the Federation of Small Businesses (FSB).

The FSB's national policy chairman John Walker said that the scheme would provide a vital cash boost for struggling firms.

"Many of these measures, such as giving businesses longer time to pay bills and offsetting losses, will give small businesses a welcome breather from the taxman and allow them to concentrate on sustaining their business, supporting their staff and growing the economy in the long term," he said.

The Forum for Private Business (FPB) also broadly welcomed many of the measures, but chief executive Phil Orford warned that much of what had been given "will be clawed back post-2011".

"In addition to short-term liquidity solutions, we were hoping for medium- and long-term policies to provide more certainty for business owners," he said.