Small business bank account confidence fragile, survey says

A recently released survey suggests that small business bank account confidence has been declining over the second quarter of this year, indicating that economic recovery is demonstrating a fragility that requires redoubled effort in encouraging growth in the private sector.

The Federation of Small Businesses recently surveyed in excess of 1,200 of its members recently, finding that at net only 4 per cent of the survey’s respondents believed that the third quarter of 2010 will bring business prospect improvement.  A March survey from the FSB which asked the same question had a 16 per cent response.

The study found that revenue growth remained weak, which leads to a reduction in working capital and  could additionally prevent businesses from having the requisite liquidity to secure business loans.

The recent survey additionally suggested that nearly 67 per cent of small businesses were operating below their capacity; businesses in the service sector seemed worse off than manufacturing firms.

Another indication of how the economy may be far off from a full recovery is in the South East, where a full 64 per cent of respondents were working under capacity, a statistic that stood out from all other regions in the UK.

While the government proposes to hold that area, London, and additionally the South East of England exempt from the Emergency Budget’s newly announced National Insurance holiday, the FSB expressed concern for the business entities in the region, feeling that they may not have the requisite support for growth.

The FSB, or Federation of Small Businesses, is the campaign pressure group in the UK that both promotes and protects the interests of small business owners and the self-employed. Formed in 1974, it now has  213,000 members across 33 regions and 194 branches of the UK.

More information regarding the FSB can be found directly at their website.

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