Small businesses are better placed to survive the current downturn than they were during the last UK recession, according to the Bank of England’s new representative in Scotland. BoE agents are charged with reporting business conditions in the regions and nations of the UK, ahead of each meeting of the monetary policy committee (MPC).
Tony Strachan, who took over three weeks ago as the bank’s Scottish "agent", said he believes the type of finance offered to small firms has changed for the better since the early 1990s, making it easier for SMEs to stay afloat.
"Over the past 10 years we’ve seen a marked shift in the proportion of lending to SMEs in favour of term finance, rather than overdraft finance.
"Small companies on overdraft finance had the rug pulled out from under their feet as soon as the going got tough in the last recession, but that is less likely to happen today because of the different finance they’ve negotiated."
