'We are struggling to get bank loans'

Cash-flow has become a real problem for many small firms

The government has unveiled plans to guarantee up to £20bn of loans to small businesses to help them survive the economic downturn.

Here, UK small business owners speak of their difficulties in getting finance deals from the banks and respond to the latest measures.

VIV WILSON, NASH, MILTON KEYNES

Viv Wilson, who runs a metal stockholding business, has dozens of orders waiting to be processed but does not have the funds to supply the goods.

He has had his overdraft taken away and faces hundreds of pounds in charges for bounced cheques each month.

"I am having to start off this year putting my own money into the business to keep us ticking over," he says. "I cannot buy the materials for customers.

"I have 40 orders to fulfil and I cannot do any of them and I cannot pay myself."

I don't know why the bank doesn't see me as a viable business. They are just not interested Viv Wilson

Mr Wilson has just applied for another £1,000 overdraft to help get through the next few weeks, but he is not hopeful he will get it.

"My business manager has not returned my call - and the new relationship manager has not contacted me. That is the culture."

Mr Wilson has been running his own firms since 1982, but says his latest business of supplying small quantities of metal to the general public and through mail order should be regarded as the most secure yet because his customers all pay up front.

"It should be a cash cow," he says. "I don't know why the bank doesn't see me as a viable business. They are just not interested."

He believes the latest moves by the government to secure up to £20bn of loans will "do nothing whatsoever" to ease the wider lending crisis.

"Banks should be lending money. It is a joke," Mr Wilson says. "You question why you bother sometimes."

JEYSON FLEGG, AYLESBURY, BUCKS

Jeyson Flegg says his specialist machinery moving business has seen its good finance deals replaced by more expensive ones which require large deposits.

A deal of £1.1m from two banks agreed in 2007 for the purchase of new vehicles expired before delivery of the specialist trucks and trailers.

The new deal negotiated during the current financial crisis will now cost the company an extra £3,500 each month, Mr Flegg says.

"This is unviable for us," he continues.

Flegg Transport has seen finance deals become more expensive

"The banks are starting to lend money again. We have agreed credit again but it was hard fought - we fought tooth and nail to get it. It is very difficult."

The latest government action in favour of small businesses has come "very, very late", he argues, adding that "so many companies have already gone".

Mr Flegg would like to see banks assessing small businesses for risk, and offering government-backed loans to all those seen as viable.

With regard to his own company, founded by his mother in 1975, Mr Flegg says it has survived previous hard times and he believes it will ride out another.

This is partly down to the fact that the firm also clears warehouses of machinery once businesses go bust, ensuring it benefits as well as loses in the downturn.

But, he adds: "It's going to be very, very difficult.

DAVE, LANCASHIRE

Dave - who does not want to be identified - is also having difficulty with cash-flow at his business making bespoke wood products.

Monthly orders are half what they were a few months ago and Dave is struggling to pay the bills because customers are asking for longer and longer to settle accounts.

Due to cash-flow problems and the drop in sales, the firm has already laid off half of its 34 staff and those left are working short time.

I don't know if I can pay the staff Dave

"We used to sell £120,000 a month - orders are down to £60-£65,000 and we are still paying for the timber we bought three months ago when sales were up.

"Now we are suffering as people are extending the time for paying us. I don't know if I can pay the staff."

Dave welcomes the news the government is offering help to businesses like his, but he says it is "too little, too late".

"I am hoping this is good news," he says. "But it all sounds vague at the moment. We will have to see."

Just £30,000 would "save 18-20 people's livelihoods" at his company, he says.

He adds: "Until we get the right noises from the banks, it will just take one company to take us out of business."