Recruiters have welcomed plans to force banks to lend to small businesses.
 
The Chancellor Alistair Darling reinforced his calls yesterday to consider new legislation to force banks to lend to small businesses which are struggling with the recession. Philip Seager, managing director at Alan Mitchell Financial Recruitment, told Recruiter that the move would help ensure more companies stay in business. “There will be less redundancies which will be good for everyone if credit is extended to small businesses,” Seager said.
 
Uzair Bawany, managing director at Contact Recruitment, warned that medium-sized firms were most at risk. “Smaller recruiters are probably least vulnerable. A lot of them are very small outfits with very few people and minimal overheads. Generally, they have very strong cash reserves from the last few years. Medium-sized firms are probably the most vulnerable because they have tried to compete with the larger firms trying to punch above their weight. They have used a lot of their cash flows to expand and build a business. The large ones will feel it less so. They are going to feel some of the pain but they have got a scale and a critical mass.”
 

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