Councils Offer Credit Loans
Published / Last Updated on 23/01/2009
Councils Offer Credit Loans
In a move to help business survive and therefore protect jobs and indeed local tax revenues, Birmingham City Council and Essex County Council are to start offering loans to businesses that are struggling to raise credit elsewhere as reported today on BBC Radio 4.
It was suggested that these councils will work with banks and building societies to agree terms rather than lending tax payers money.
We suggest this is a dangerous line to cross. Councils should stick to managing local services and not get involved in corporate finance.
- Will councils become regulated and register with the Financial Services Authority?
- Will they be liable for poor lending or defaults?
- Will they recruit qualified staff?
Whilst we accept the intention is good, the reality we suggest may prove to be akin to ‘opening a can of worms’.
Useful links:
Request expert financial advice now
Purchase guidance on financial planning in the Money Shop
