The collapse in the banking system has been bad for the entire economy – but the simple fact is that SMEs are being severely penalised by the banks – they just do not want to lend because they are afraid that the businesses that want to borrow won’t pay them back.

So on the face of it it’s a good thing that the Government has announced it’s going to create a Small Business Bank to get cash to the companies who most need it. Inevitably there’s a problem which appears to be that the new bank will actually merely bundle together all the existing schemes for lending to small businesses – Enterprise Finance Guarantee, Business Finance Partnership etc.

The new bank definitely will not have any new cash and it won’t necessarily have any more autonomy from Government. Essentially, it looks more like a re-branding exercise than anything new, but it’s quite possible that as the idea starts to develop new schemes will be included.

For the sake of all small businesses let’s hope so, as without cash companies are unable to expand or take on new employees and as a result, the economy is flat lining at best and contracting at worst.

However, much can be done to improve existing cash flow and to rescue ailing businesses so if you need help just call me for a no-obligations chat and we’ll see what can be done.

Contact Andrew on 07774 110788, or on Twitter @Andrew_Hawkins