Funding For Lending Scheme To Promote Lending To Small Businesses

The UK government launched its new Funding for Lending Scheme in August 2012 to encourage banks to lend money to small businesses. The £80 billion scheme effectively allows banks to have access to cheap finance from the Bank of England provided that the funds can be earmarked for lending to small businesses. The aim of the scheme is not only to promote increased lending to SME’s but also to enable the banks to offer more competitive loans to borrowers. 

We would advise entrepreneurs, contractors and small business owners who are looking to raise finance to discuss the Funding For Lending Scheme with their bank. If you are looking to raise finance then this may be the right time to apply for a loan as the banks can only access the cheap finance if they can pass this on in the form of loans to small businesses. 

We are currently working with our banks to determine how best to meet the needs of our clients. If your business is currently seeking finance and is interested in finding out more about the Funding For Lending Scheme please feel free to contact us and discuss this with our team.

New Agency Workers Regulations Effective October 2012

The new Agency Workers Regulations have been introduced from 1 October 2012 in accordance with EU Directives. The new regulations provide agency workers with the same rights to pay and most benefits as permanent staff if they are employed for a period of more than 12 weeks.

Contractors and other agency workers are advised to take note of the new regulations to ensure that they receive the appropriate benefits to which they are entitled including holiday pay.

Employers on the other hand are faced with increased costs in respect of employing temp staff. In some industries the demand for agency workers has waned as the cost differential between permanent and temporary employment has reduced.

Spanish Credit Rating Slashed

Last week rating agency Standard & Poor’s downgraded Spain’s credit rating highlighting a deepening recession and mounting pressure on Madrid's finances as major factors behind this decision. S&P cut Spanish debt from BBB+ to BBB-, one level above junk status, and warned of possible further downgrades. 

The problems in Spain continue to place further strain on the eurozone and the future of the Euro remains in doubt as no viable solutions have been forthcoming from Brussels. Former Italian Prime Minister, Silvio Berlusconi hit the headlines this week stating that Germany should leave the Euro in order to enable other countries in the single currency to improve their competitiveness. 

The future for the Euro looks grim. It is highly likely that the Euro is due a major devaluation despite Mario Draghi’s promise of unlimited QE. Either Spain or Greece will default and crash out of the Euro or Germany will be forced to leave. Either way, the value of the Euro is expected to decline. The current exchange rate of the Euro to the Pound is 1.24.