The Federation of Small Businesses is urging the Government to include protection from credit card interest rates as part of their efforts to aid small businesses in 2009.

The Federation is lobbying to bring in a cap on interest rate charges as they reveal that around 25 per cent of small businesses claim that they use their credit cards to support their business ventures and a cap on the interest on these cards would be a major help, allowing the small business owner to free up some helpful money.

The call for Governmental support comes from John Wright, the Federation’s chairman, who said, “With base rates at 2pc and falling, the Chancellor and the Governor of the Bank of England must look into capping interest rates charged on credit cards.  A cap on interest rates will at a stroke not only reduce business costs but give consumers a real boost and cut the cost of borrowing.”

Wright went on to stress the importance that a cap on interest rates would be on the sector, saying, “We know that entrepreneurs use both personal and company credit cards to finance their business.”

“Small businesses can and will play a pivotal role in driving the UK economy out of recession and onto the motorway of recovery,” continued the Federation’s chairman.

“There will be many side roads and nooks and crannies but with support from the Government, the banks and others, we can all reach a destination in 2009 that takes us out of the dark tunnel of recession and onto the bright road of recovery.”

The Federation also stressed that the recently announced £1 billion Small Business Finance Scheme that was announced by Alistair Darling in the pre-budget report should be made available immediately and the Government should take steps to ensure that businesses are paid on time and in full.

The FSB is calling for their to be an introduction of a 2 per cent bass rate and the news for the banks comes after a series of blows seeing them bowing down to the needs of the public.

Meanwhile, John Wright has also expressed his views on the coming New Year, 2009, stating that the New Year should bring with it a limit to the amount of regulations that are enforced onto small businesses, which in Wright’s words are “drowning” these small firms.

Wright claimed that, “2009 must be a year of action for small businesses.  The small business sector is the sector to see the UK out of the recession.  Small businesses are innovative, enterprising and flexible, but an increase in late payments, a decline in trade and poor access to finance will leave thousands facing closure in 2009.”

The small business minister, Baroness Vadera, is said to be preparing to announced the launch of the funding for small business by the end of January, which will offer loans to small businesses ranging between £5,000 and £1 million with apparently more generous terms than the ones currently in force.

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