The Federation of Small Business have said that the scheme is not doing enough and that most of the companies reapplying for a loan do not represent the majority of small businesses struggling to find a loan.

Russel Griggs is responsible for the external review of the scheme and he has recently commented, “We have been very pleased with the successful initiation of the scheme, especially the response we have had from banks which has been very positive.

When people appeal their case, the loan application is looked at by a higher level in the bank and another decision is made on whether a loan should be offered. Generally, this is because during the appeal more questions are asked and a deeper exploration of why the loan is needed is conducted.”

The initial project was launched late last year and involved several of the major lenders in the UK. It is one of nearly 20 measures that the Department for Business have set out to improve the lending situation for small companies in the country.

The initial green paper which sparked the changes claims that there was a major problem in communication between banks and small businesses as the banks had claimed they were being approached about the loans that the small businesses said they were being offered.

Professor Griggs continued, “There was a lot of reckless lending going on before 2008 and banks were very eager to give out loans. However, in 2008 that all changed and banks become much stricter on their lending, and their confidence disappeared overnight. Small businesses should also understand that the situation has changed for the banks as well so loans aren’t as available as they were before.”

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The funding will come from the state controlled banks Royal Bank of Scotland and Lloyds under the terms of setting a capital growth fund so that firms that are growing fast may eventually increase their worth up to around £500m.

Alistair Darling stated that the measures are central to the new budget plans and ultimately they would help the government better back the finances of the nation.  Darling said that the country cannot afford to take growth for granted and need to start acting as a launch-pad to help businesses grow and succeed.

Darling pledged that it would award more contracts to SMEs by 15%, reduce business rates so that 345,000 SMEs will not have to pay, double the threshold for entrepreneur relief up to £2m, and make the annual investment allowance £100,000 which is double its previous rate.

Additionally, the government will support SMEs by creating an appeals process that SMEs can turn to if they feel they have been rejected for credit unfairly.

Small firms for the most part applauded the new announcement and proposals but there was some disapproval shown at the fact that the government will still move forward with the plan to increase the amount that firms need to contribute in towards national insurance.  According to the Federation of Small Business, the increase in national insurance could cause redundancies that total around 57,000.

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The 2010 Cisco Customer Kings report looked at how small firms deal with their customers and found that out of the 1,000 businesses surveyed, 61% reported that they are optimistic about the coming year with another 77% expecting the economy to take an upswing this year.

However, even though the UK SME landscape has developed a DIY attitude, many are in danger of becoming split between modernized firms and customer centric firms that will go up against those that are not willing or ready to be flexible to the needs of their customers.

Overall, 57% reported that they had begun to focus in on their customer service in order to make it through the recession, but a stunning 43% stated that they had not looked into better customer service which means that they may soon start to reap the repercussions.

The large gap between businesses that are not consumer centric and those that are becomes more dangerous due to the fact that now customers are willing to look for new suppliers compared to last year.

Five other attributes of successful SME businesses were also outlined in the report as being customer focus, e-commerce, business model, social media usage, and technology.

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Many of the counties that have pledged to utilize the standards are either emerging or developing economies and have noted that they would like to use the new financial standards for SMEs fully by the year 2013.

Director of standards for SMEs for the International Accounting Standards Board, Paul Pacter, conducted the poll during a meeting in 2009 after the new rules were in force for two months.

The project, which is based on a seven year timeline, is aimed at producing a consistent set of rules for use by SMES that were published in July of 2009 in a 230 page booklet.  The booklet was met with approval from the World Bank and many other international organizations as a positive way for emerging economies to increase the capital within their counties.

The goal of standardization of accounting is that investors will better understand how much a company is valued at, regardless of where it operates, which may prompt them to invest in a company they otherwise would overlook.

Some of the most eager countries to start using the new standards were Brazil, Swaziland, and El Salvador, which all are considered to be emerging nations.

Pacter said this is due to the fact that the smaller counties want to have better access to potential capital which the consistency will allow them. He now feels that the time is right for the EU to take a positive lead in implementing the same rules within the Union

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Research from Remploy and ComRes found that only eight percent of all SMEs that do not currently employ disabled people have any interest about learning if disabled people could work at their companies.

Since SMEs make up about 99% of all the UK businesses the research is disappointing for those who may have learning disabilities or mental health issues since it shows that SMEs are not likely to employ them.

Today only an estimated one out of every five SMEs will hire a disabled person, but out of those about two thirds reported they would not hire someone with mental health issues or a learning disability.

Two thirds of the employers in the survey reported that they do not need support on the legal ramifications of the disabled laws, and also do not need any information about hiring people with disabilities.  Out of these only half even knew the provisions outlined in the Disability Discrimination Act.

Chief executive of Remploy, Tim Matthews, stated that in general businesses are usually worried about the reliability of people with disabilities versus “normal” workers but that in his experience with Remploy those with disabilities are often more likely to take fewer days off work and stay at their jobs longer.

He continued to say that the amount of people with disabilities who currently hold a job is scandalous when compared to how many people would like to have a job.

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An unidentified source from the Government stated that investigators are not focused on forcing the banking institutions to make uneconomic loans, but current research shows that they may be increasing the price of credit past realistic levels.

Both banking institutions are members of the Government Asset Protection Scheme, under which they agreed that they would lend an increase of £39 billion in loans to SME’s above the previous norm.

Although both of the banks will be able to reach the target of mortgage loans by March, the banks have admitted the same target will not be achievable in terms of corporate lending.

At the same time as the investigation, SME’s have also reported an increase in anxiety when it comes to finding loans.

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The results showed that 58% of all SME owners believe that the recession will be around at least until spring of next year, with about the same amount stating that their company’s overall health is dependent on the economy.

Additionally, out of these 25% stated that even once the economy enters a recovery stage their business will still feel the aftershocks of the recession.

Along the lines of the old adage hindsight is 20/20, if businesses could foresee the recession and change their response 32% said they would have reduced the amount of employees they hired and 43% said they would have put more time into their marketing and sales efforts.

According to the survey, in order to deal with the results of the recession 58% of the businesses surveyed were cutting costs. 42% were improving their website and online business fronts, and 38% were attempting to find new partnerships.

Thus, over half are focusing on marketing techniques to beat the recession as of the survey date.

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