Last year Business Debtline spoke to a record number of small business owners and directors. In all, Business Debtline advisers answered nearly 38,000 calls – a highest number in the service’s history – from 26,000 small businesses, of which 6,181 had debts of over £50,000.

Nicola Connop spokesperson for Business Debtline said: “Our team of advisers speak to thousands of struggling small businesses every month. Many of these businesses have been hit by the tough economic climate, with lots of callers pointing to trade shortfalls, late payers and supplier issues as the reason for their difficulties. It is clear to us that the difficulties faced by small businesses extend far beyond the insolvency figures announced today.

“Whilst insolvency can seem like a daunting process, there are occasions where it will be the best option, both financially as an individual, and also with a view to trading again in the future. Business Debtline can help small businesses identify when insolvency might be a sensible move. Where it isn’t the right option, we can help small businesses get back on their feet.”

Business Debtline is open 9am – 5:30pm Monday to Friday. Call 0800 197 6062 for free, independent and confidential advice.

The TUC report Banking after Vickers says that government has identified £450 billion-worth of physical investment, vital to the UK over the next decade. But with the current stock of bank loans to non-financial firms (excluding real estate) at just £322 billion, banks would need to more than double their current level of lending to meet UK investment needs. This simply won’t happen without radical reform of the banking sector, says the TUC.

Banking after Vickers says that since 2008 the main focus of debate on banking has been preventing a repeat of the crash and subsequent taxpayer bailout, addressed by the Vickers Commission, and the remuneration of top bankers.

But with the UK’s growth prospects dependent on greater investment and access to credit, particularly for SMEs, the report argues that reforming the banking sector so that it better supports the real economy is the most vital banking issue facing the UK.

The report sets out four challenges facing the UK banking sector: low investment, SMEs, sectoral and geographical rebalancing of the economy and green growth.

Banking after Vickers shows that the UK’s level of investment has been either the lowest or second lowest in the G7 for 30 years, and that the banking sector has a poor track record of lending outside of real estate and finance.

While credit easing and the Green Investment Bank are positive first steps towards encouraging more lending, they fall well short of the level of investment the UK economy needs, says the TUC.

TUC General Secretary Brendan Barber said: “Much of the media and political debate around banking has been on top bonuses and preventing another financial crash.

“But while these are both important issues, people are more concerned about jobs, better wages and healthier businesses – and banks have a vital role to play in creating all this.

“Decades of under investment, compounded by banks’ poor track record of lending outside of real estate and finance, have left the UK economy dangerously lopsided. Our economy is far too focused on finance and banking, and in the South East.

“Greater lending to SMEs and support for green investment is vital to our future economic prospects but our current banking system is woefully ill-equipped to lend.

“Bold new ideas are needed to reform the banking sector so that it returns to its proper place as the engine of wider economy growth, and not as the cause of an economic depression.”

Dayoffice Card, the brainchild of former Regus sales director Matthew Stubbs, enables start-ups, SMEs, sole-traders and companies with a mobile workforce to occupy office space at more than 150 business centres across the country on a pay-as-you-go basis – keeping overheads low and productivity high.

The business enables people to buy individual days as and when they’re required, or for customers to opt for a pre-paid membership plan for a fixed number of days per month, be it two or 22.

Stubbs, managing director of Dayoffice Card, said that the business had launched at an optimum time, as financial forecasters suggest that the economy is entering credit crunch for the second time in five years.

“The past five years has seen an enormous number of start-ups launch and businesses of all sizes are examining expenditure as they undertake cost-cutting measures in order to survive the next wave. Underutilised office space represents a gulf when it comes to wasted expenditure.

“The last economic crisis led to an increase in mobile and home-based workforces as spending-savvy companies became more dependent on smartphone technology and other mobile devices

“We recognised a niche in the marketplace and Dayoffice Card was established with the aim of connecting professionals who won’t or can’t justify a full time office. Dayoffice Card is very much a cost effective solution for start-ups and SMEs that are home-based or operate a mobile workforce.  It’s especially useful for those needing a more professional environment for client meetings or to complete a project free from distraction,” he said.

Dayoffice Card already operates in London and 100 other major cities and towns including Edinburgh, Birmingham, Manchester, Leeds, Cardiff, Liverpool and Sheffield, offering prestigious addresses in the heart of each city as well as office solutions in surrounding towns and business parks.

Firms with 101 to 500 employees paid their invoices three quarters of a day faster than in the previous quarter (from 25.84 days to 25.07 days), while firms with more than 501 employees improved by two thirds of a day (from 34.77 days to 34.12 days).

These businesses also led the way in improvements when compared to their payment performance in Q4 2010. Firms with more than 501 employees settled their invoices almost two days faster while firms with 101 to 500 employees improved by almost three quarters of a day – from 36.06 days and 25.79 days in Q4 2010, respectively.

Jason Mills, head of payment performance at Experian UK & Ireland, said: “Payment performance is the timeliest indicator of the current health of any business, so the overall improvement suggests that during the last three months of 2011, pressure on cash flow and finances was more manageable for most businesses.

“Feedback from our larger customers demonstrates awareness and understanding of the struggles faced by some of their key SME suppliers so are prioritising payments to them, to better support them.

“The only firms to see an increase in their payment performance from Q3 to Q4 were firms with three to five employees. The increase, however, was very small and is a timely reminder for smaller firms to credit check potential new and current business customers for signs of possible non-payment before it is too late.”

The Enactment of Extra-Statutory Concessions Order 2012, passed on Monday afternoon by the House of Commons First Delegated Legislation Committee, gives legislative effect to six extra-statutory concessions (ESCs), including ESC C16, which deals with the tax treatment of distributions to shareholders when a small company is dissolved.

The CIOT and the Institute of Chartered Accountants of England and Wales had written jointly to Exchequer Secretary David Gauke, the Labour Treasury team and other members of the committee considering the legislation asking them to withdraw or reject the legislation to allow it to be amended. Although some of the concerns of the two bodies were referred to during debate, the committee passed the proposal without a vote after just 20 minutes of discussion.

Andrew Gotch, chairman of the CIOT’s Owner Managed Business Sub-Committee, said:

“It is extremely disappointing that the Government has chosen not to listen to the concerns of the tax profession and small business and have pushed this measure through.

“Currently ESC C16 provides a simple, straightforward and inexpensive way for a company to be wound up at the end of its life without the need for a formal liquidation, but with the same tax consequences as if it had been liquidated. However, the Government has brought this concession into law in a way that is far more restrictive, limiting it to companies whose total distributions come to no more than £25,000.

“The effect of this will be to impose significant additional financial and administrative burdens on small and medium-sized businesses, directly contrary to the Government’s stated policy in this area.”

The announcement comes straight on the back of the news that McDonald’s and Starbucks are expanding, creating 2,500 and 5,000 new jobs respectively. Consequently, more people than ever before are seriously considering franchising as an option for starting their own business.

The government are once again calling on those with the entrepreneurial spirit to go forth and rebuild our economy. Prime Minister David Cameron said at the launch of ‘Business in You‘(a major new campaign aimed at inspiring people to start or grow their own businesses):

“Small businesses and entrepreneurs are the lifeblood of the British economy and I am determined that we, working with the private sector, do everything we can to help them to start up and to grow in 2012. I want to encourage people to go for it and make this the year of enterprise – whether that is fulfilling their dream of starting a new business or taking the leap to grow their business, to employ more staff, or to start exporting.”

Finding the right business to launch in such difficult times can be risky and the harsh reality is that one in three new businesses fail within the first three years. In stark contrast 98% franchise businesses are still going after 3 years and the percentage of franchise units profitable (including new businesses) is 90% according to the British Franchise Association (BFA) survey from Natwest.

The Franchise Show is a free resource for anyone thinking of buying a franchise, taking place at ExCel London over 24th – 25th February 2012, the show will host 120 brands from fast food to locksmiths to accountancy firms.  There will be over 100 free seminars from the industry experts, and the opportunity to find out about franchise financing options.

To find out more about franchising visit www.TheFranchiseShow.com

Follow the latest news, views and updates about the show on Twitter @FranchiseShowUK

Paul Aitken, CEO of personal asset lender borro commented: “The deadline is fast approaching for people to submit their self-assessment tax return. People who find themselves with a larger than expected tax bill or waiting to claim tax allowances, may need short-term finance – either for themselves or their business.

“Tax related applications to borro have already increased by 39 per cent from 2010 to 2011 and we expect this trend to continue.”

According to the latest monthly CBI Distributive Trades Survey covering the first two weeks in January, 44 per cent of retailers saw sales volumes fall on a year ago, while 22 per cent reported a rise, giving a balance of -22 per cent. This was the lowest since March 2009 (-44 per cent), but was broadly in line with expectations (-18 per cent).

Retailers reported sales were disappointing for the time of year (-20 per cent) and orders were also down (-14 per cent), with firms expecting levels to fall again next month (-23 per cent). Stock levels remained constant, but fairly low, in line with recent months (+10). Retailers expect annual sales volumes to continue to fall in February, albeit it at a slower pace than this month (-10 per cent).

There was a mixed picture across the sub-sectors, but with most reporting a fall in sales volumes on a year ago, including hardware & DIY (-80 per cent), durable household goods (-100 per cent) and non-specialised retailers such as department stores (-34 per cent). Grocers saw a modest increase in sales (+6 per cent), following a much stronger trading period in December (+52 per cent). The non-store category, which includes online and mail-order, performed well (+50 per cent).

Ian McCafferty, CBI chief economic adviser, said:

“Shoppers have reined-in spending across the board at the start of the New Year after taking advantage of early discounting last month, which boosted pre-Christmas sales.

“Family budgets are under continuing pressure with inflation still high and wage increases modest.

“Consumers are still holding off particularly from buying big ticket items like washing machines and fridges. Online and mail order sales were the only areas that performed well in January, but growth was still down on last month.”

Among wholesalers, 59 per cent saw sales volumes rise, while 22 per cent reported a fall, giving a rounded balance of +36 per cent, exceeding expectations of -2 per cent. Sales are expected to increase again next month (+24 per cent).

Motor traders saw sales volumes fall for the 13th consecutive month (-9 per cent), and a similar decline is expected next month (-12 per cent).

The bank will continue to provide support for businesses which trade or aspire to trade internationally and commits to providing lending facilities to support business growth and job creation.

The bank has confirmed that it met its Merlin lending intentions in 2011, which were agreed with the UK Government, exceeding the full year target to provide £38.8 billion of lending facilities to UK business customers and supplying gross new lending facilities of more than £11.7bn to Small and Medium-sized Enterprises (SMEs).

Having met its Merlin intentions in 2011, HSBC plans to lend even more to SMEs in 2012, providing there is suitable demand. In addition, to reinforce the bank’s strategy to be the leading international trade and business bank, HSBC will further support UK businesses by committing to:

• Recruit around 50 additional International Commercial Managers, ensuring customers involved in overseas trade are fully supported. This will bring the total number of International Commercial Managers to 180;
• Support export trade to the tune of £7 billion through our Trade Finance capabilities;
• Look to manage £30 billion of invoices for customers trading within the UK or internationally, providing critical working capital for these customers;
• Look to approve at least 80 per cent of applications for finance from SMEs; and
• Extend the availability of HSBC’s International Business Overdraft, which offers reduced interest rate for each overseas country a small business is trading with, up to a maximum discount of three per cent for the first 12 months.

Jacques-Emmanuel Blanchet, head of commercial banking UK at HSBC, said: “HSBC is committed to supporting UK business. In 2011, the Merlin intentions gave focus to SME lending, and we continued to enhance our support, launching new innovative products and holding hundreds of events across the UK and the world, to encourage UK businesses to share their knowledge and develop long term relationships internationally.

“In 2012 we will further increase our support for SMEs looking to grow and internationalise, across all sectors and all regions. Many of our customers are experiencing growth by trading in new markets and we are very well placed to support this, through our growing team of specialist International commercial managers and HSBC’s enviable global network, to give UK businesses the best chance of success.”

The Government and private sector campaign is based on the concept that there is “a business in everyone” and that all businesses can realise their ambitions. Partners in the campaign include StartUp Britain, the Confederation of British Industry, the British Chamber of Commerce, the Institute of Directors, the Federation of Small Businesses, the Forum of Private Business, the major banks (via the British Bankers’ Association and the Better Business Finance Campaign), the Engineering Employers Federation, the Social Enterprise Coalition, the Institute of Credit Management, Microsoft, Mitie, Ernst and Young and Grant Thornton.

In further action to help small businesses get off the ground, the Prime Minister has also announced plans to make empty and under-used Government offices available to small businesses so that they can start up and grow.

There is a wealth of information and help available to SMEs – the Government and the private sector have come together to make sure that small firms and budding entrepreneurs know what is available and to expand the offer, with some of the campaign partners providing free services including workshops, web-based seminars and video tutorials on issues like finance as well as providing mentoring and access to face to face consultancy sessions.

The campaign, running nationwide throughout 2012, showcases real life small business owners who come from a wide range of backgrounds, and each has an inspiring story of how they turned their passion into their livelihood through hard work and support. Launching today, it will roll out through radio adverts, outdoor posters across the country and national and trade press.
The campaign features a new ‘Business in you’ web portal which will bring together the resources available to business owners and entrepreneurs to help them start or grow their business as well as inspire them with stories of how other people have achieved success.

Each month, the campaign will focus on a different theme relating to start ups and growth including exporting and employment and will highlight the wide range of Government support available; from online advice on Businesslink.gov.uk through to specialist schemes such as the Enterprise Finance Guarantee that underwrites some of the cost of bank loans to SMEs.

Prime Minister David Cameron said:
”Small businesses and entrepreneurs are the lifeblood of the British economy and I am determined that we, working with the private sector, do everything we can to help them to start up and to grow in 2012. I want to encourage people to go for it and make this the year of enterprise – whether that is fulfilling their dream of starting a new business or taking the leap to grow their business, to employ more staff, or to start exporting.”

Business and Enterprise Minister Mark Prisk said:
”There are some great inspirational success stories across the UK of businesses that have started up and grown into successful local, national and international companies. We want people to follow their example, realise their own business potential and help make 2012 the year of enterprise.

“I know that starting and growing your own business can be a daunting task, but there is help available to potential entrepreneurs who have the desire to take their ideas forward. The Government is providing more opportunities for people of all ages and backgrounds to either start or grow their business, which in turn will help boost the UK economy.”

Michael Hayman, Co-Founder of StartUp Britain, said:
”Is there a business inside you? We believe the answer is yes and we want to inspire those with a dream to make it a reality by starting their own business. All around the country are people proving by their own actions that you can make it in Britain, be your own boss and create the jobs that can help transform communities. This campaign champions the courage and determination of Britain’s entrepreneurs, the people that change things, the people that have a go.”

To help small businesses get off the ground, the Government is also announcing plans to make empty and under-used Government office space available to small businesses so that they can start up and grow. Many entrepreneurs struggle to find a suitably flexible and affordable space to start their business, so this practical measure taken by the Government will support the next generation of British businesses.

There are currently over 300 buildings in the Central Government estate with space in England and the Government, working in co-operation with landlords, will offer as much as this space as possible to small businesses, giving them space to grow at a low cost. The Government will invite incubation organisations, who help new and existing small businesses prosper, to manage and allocate these spaces. These organisations will also provide the businesses with access to support and business advice.