Small firms sceptical over plans to increase Business Bank lending
17th July 2013 | News
New figures from a survey of more than 1,000 SME directors and managers found that just six per cent of small businesses believe the Government’s additional investment in its Business Bank will benefit their companies.
The report, by Bibby Financial Services, questioned respondents on how the Government’s approach to the economy had affected their business since 2010.
The Business Bank, announced by business secretary, Vince Cable last autumn, is designed to aid SMEs which are struggling for funding. The Government pledged £1bn in new lending towards the scheme with additional investment possible from within the private sector.
After releasing £300m of funds back in April, a further injection is likely next month; however the project has already come in for criticism from numerous business groups.
David Petrie, head of corporate finance at the Institute of Chartered Accountants of England and Wales (ICAEW), said: "The proposals put forward don’t appear to address the needs that businesses have and the finance gaps that exist.
"It is shaping up to be a missed opportunity to make a real difference, especially to micro and smaller businesses."
The British Chambers of Commerce (BCC) has also insisted the Business Bank requires a much larger injection of Government money in order to truly get off the ground.
David Postings, UK CEO of Bibby Financial Services, believes the Government should increase its funding through non-bank lenders.
"Government lending channelled through banks has not been reaching businesses as the banks are only lending to those at the safer end of the spectrum," he said.
"But these aren’t necessarily the businesses that require funding the most, so there is an element of cherry-picking going on."