Business Finance - Banks fight foot-and-mouth.

The British Bankers’ Association has urged businesses suffering from the outbreak of foot-and-mouth disease to seek to negotiate their way out of trouble by talking to their banks.

‘Banks recognise there will be longer-term viability issues for some businesses arising purely as a result of the foot-and-mouth outbreak and they will be working with the government’s Small Business Service to explore options including extension of the scope of the small firms loan guarantee scheme to assist businesses in these circumstances,’ said Tim Sweeney, director general of the BBA.

The call comes as an Accountancy Age survey discovered more than one in five UK businesses have been affected by the foot-and-mouth crisis so far.

Last week’s Accountancy Age/Reed Accountancy Personnel Big Question survey of more than 300 FDs found the impact of the disease is being felt beyond businesses immediately connected with farming.

Sectors as diverse as television production, retail, leisure and advertising are feeling the pinch.

Sweeney said banks will support business hurt by the epidemic. ‘Banks understand the problems being faced by businesses from all sectors affected by the foot-and-mouth disease outbreak,’ he added.

‘Wherever possible they are keen to support their customers on a case-by-case basis. ‘All customers in difficulty or expecting problems should contact their manager locally as soon as possible to discuss the options that may be available.’

The Royal Bank of Scotland Group has agreed to make a #1m donation to charities working to alleviate the personal hardship experienced by farmers and farm-related businesses affected by the spread of the disease. Tourism is one of the key industries affected. The Youth Hostels Association has estimated it will lose more than #2m as a result of the outbreak. Last month it closed more than 110 of its 230 youth hostels.

However, the association has stressed that some hostels – including ones in cities like Manchester – are both open and fully booked. As negative publicity on foot and mouth increases, David Marshall, director of exhibitions at Shakespeare’s Globe, has called for the government to move tourism up the national agenda.

‘We have to tell people what the real situation is and recreate trust in Britain as a safe destination for any in-bound visitors. The overseas media are not making it clear that foot-and-mouth disease affects animals only,’ he said.

For more on the BBA website go to www.bba.org.uk.