According to a study of 425 finance professionals conducted by commercial credit referencing agency Graydon UK, 91 per cent of respondents believe that the proposals will make it harder for small businesses to access trade credit.

The survey also finds that 87 per cent of respondents do not believe that the government’s attempt to reduce the administrative burden on small and medium-sized enterprises (SMEs) by removing the requirement to file statutory accounts will help drive business growth.

Martin Williams, head of external affairs at Graydon UK says, ‘The government has repeatedly overlooked the simple fact that it is not just banks that provide small businesses with credit, but also their suppliers in the form of trade credit. These suppliers are saying that being deprived of access to their customers’ accounts will hinder small businesses in gaining access to credit and finance from their company.’

Continues Williams, ‘The availability of funding for SMEs remains a major issue. While banks have access to up-to-the-minute financial information on their customers, it is vital that trade suppliers can also determine the strength of their customers’ finances before they agree to provide them with goods and services.’

Philip King, chief executive of the Institute of Credit Management (ICM) adds, ‘Exempting micro business from filing accounts is wholly the wrong way of tackling what is a comparatively simple issue: businesses should be prepared to provide more information, not less. Without financial information that can be trusted, suppliers will not extend credit to their customers.

King adds that the ICM will ‘lobby vigorously’ against the steps and against the ‘government’s insistence on delivering mixed messages to business.’