Reported on Mon, 27 Mar 2006

New figures suggest that small businesses found it harder to get off the ground last year, but a business loan may help them benefit from signs of a recent upturn.

Data released by Barclays Bank reveals that 388,300 new firms were established in 2005, compared to 446,500 the year before, which analysts have taken as a sign of slackening economic growth.

The decline was most obvious in the first half of the year, when 187,200 companies got under way, in marked contrast to the 246,000 registered in the first six months of 2004.

But John Davis, local business marketing director for Barclays, insisted that the conditions for growth were still in place, with the number of business start-ups rising to 201,100 in the latter half of the year.

Mr Davis said this increase represented a move back to "more typical levels" after the abnormal boom years of 2003-04 and could serve as proof that "the underlying market in start-ups is still reasonably strong".

With the openings still there for the savviest entrepreneurs, new companies could make use of a low rate business loan to get themselves safely up and running in a challenging economic climate.

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