According to the organisation, these authorities are best placed to deliver the £4 billion of funding from the European Investment Bank (EIB) to local businesses.
The FSB echoes concerns from company owners that while the money is welcome it will not filter through to each firm until next year.
John Wright, national chairman of the FSB, says: ‘We are recommending the government ring-fences £1 billion of EIB money for small businesses and then distributes money to the RDAs which can then in turn distribute it to those small businesses who need it most.’
He adds that small firms need an answer now and the EIB money is ‘not an immediate solution’.
Wright says the move would fit with previous calls from the FSB to create a small business survival fund worth £1 billion.
The organisation proposed the fund to tide companies over for the next six months and also suggested the scrapping of the small business loan guarantee scheme in its place.