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The Coalition Government’s Project Merlin and Umbrella Companies

15th April 2011

The bank lending deal for small businesses has come to a standstill. How will this affect the umbrella company industry?


Various organisations came together to urge the coalition government to provide more support for small businesses and umbrella companies.  Start-up businesses and entrepreneurs found the volatile economy difficult to launch new initiatives and SMEs found it tough to keep heads above water.


The FSB (Federation of Small Businesses) told the public that small enterprises, umbrella companies and start-ups can play a big part in mending the economy.  The success of small businesses can shape the UK’s future so the need for sufficient government support is more apparent than ever.


In response to this, the coalition government attempted to launch Project Merlin.  Project Merlin was a plan to cooperate with the biggest banks in the country to agree on a fair amount for small business lending. But the latest reports tell us that Project Merlin has been stalled and negotiations on small business lending still continues.  The total of around £200 billion in loans was proposed, but the total lending amount available to small business, start-ups and umbrella companies is yet to be decided.  Ed Balls, the shadow chancellor, said: "At this critical time for our economy and for the prospects of a strong recovery, the banks should be playing their part in supporting small and medium-sized businesses.  This is typical of a Conservative Party which has not been on the case with the banks since it took office and opposed tougher regulation throughout the last decade before the global financial hit." (Source: BBC News website)


With 4.8 million small enterprises in the UK, there is much potential for the British economy, but in order for these companies to become successful, it’s critical that the government provides as helps as much as possible.  In such a tough economic climate, many contractors have turned to umbrella companies to cut costs of running a business. Umbrella companies can reduce paperwork while maximising net income and new businesses can get the legal and administrative support that they need.


If you would like to find out more information about umbrella companies, contact us today.  Use our online contact form here.