UK Small Businesses say There's no Wizardry in Project Merlin

hotfrog Survey Reveals Banks are Still Stalling Business Growth

LONDON, April 5, 2011 - hotfrog (www.hotfrog.co.uk/), the world's largest global online
business directory, today released the results of a survey of more than 500
small businesses in the UK on their experience dealing with banks since the
announcement of Project Merlin in Feburary this year. Project Merlin, an
agreement between the British Government and four major banks, aims to
promote lending to businesses, particularly small businesses. However, the
hotfrog survey found that more than 75 percent of respondents have seen no
change in their banks approach to lending.

The survey also found that 70 percent of respondents said they would be
able to expand their business if they had better access to funding. Of those,
more than 80 percent would hire at least one additional staff member, with
more than a third (36.6 percent) able to hire more than one.

"If I could get access to additional funding, I could grow my business
and quadruple my revenue," said Mr. Simon Stroud, owner of Testing Made Easy
(www.hotfrog.co.uk/Companies/Testing-Made-Easy), a water testing and
analysis company in Swindon. "I find that the banks' attitude towards small
business is appalling, it feels like they just don't see small businesses as
a viable investment."

hotfrog (www.hotfrog.co.uk/), which provides a free internet
profile to more than four million small businesses in the UK, found that
nearly 70 percent (67.6 percent) of small businesses responded that the news
of Project Merlin had not changed the way they intend to approach financing.
Of these, 36 percent said credit conditions are currently too harsh for small
business, 22.5 percent said their business wasn't big enough for banks to
loan them money and 13.7 percent said the cost of borrowing is just still too
high.

"According to our survey, UK small businesses see no improvement in bank
lending since Project Merlin was announced," said David Catterall, Managing
Director, hotfrog. "The results also show a degree of optimism that if loans
were more readily available businesses would be able to expand."

When asked where they would get quick funding to support their business,
by far the biggest response was by using their own personal savings (41.3
percent), with only 19.8 percent of respondents saying they would turn to
their bank.

"Most small business owners in the UK are sole traders or self-employed
and therefore have a credit history for their personal finances. I believe
that banks take advantage of this and use it as an excuse not to lend funds.
In order to save funds, I haven't paid myself for two years. I am fortunate
that my partner works and is able to support us both, but not all small
business owners are so lucky," concluded Mr. Stroud.

About hotfrog

Founded in 2005, hotfrog is the largest global online business directory
for small businesses, operating in 36 countries with more than 61 million
listings. Owned by Reed Business Information, hotfrog offers intelligent
marketing tools helping small businesses easily turn listings into new
business leads. Year to date there have been more than more than 21 million
visits to hotfrog in UK, helping people find the SMB they need. For more
information about hotfrog please visit www.hotfrog.co.uk/

    For more information:

    James Waller or Rich Hawkins
    Weber Shandwick for hotfrog
    +44-207-067-0500
    hotfroguk@webershandwick.com

James Waller or Rich Hawkins, Weber Shandwick for hotfrog, +44-207-067-0500, hotfroguk at webershandwick.com