Treasury to explore business finance options

Date: 13th January 2010

Small businesses in the UK could be among those to benefit from new government discussions surrounding options for 'non-bank' financing.

HM Treasury has released a discussion document seeking opinions on how to diversify finance options for British firms.

The document will explore a number of finance issues including the transparency of bank loans, credit assessment and monitoring, corporate transparency and the preferences of UK investors.

Paul Myners, financial services secretary to the Treasury, said that the "extraordinary events" seen in credit markets during the economic downturn have highlighted a number of issues with businesses relying on one form of finance.

"Here in the UK, our large corporations have had a great deal of success in accessing finance directly from credit markets with a surge in corporate bond issuances," he said.

"Smaller firms, however, have not been able to similarly replace bank lending by directly tapping financial markets or non-bank financing"

After assessing feedback from the investor and business communities, the Treasury intends to introduce proposals for reform later this year.