Budget 2013 reaction: Access to bank finance

Is the £30m Growth Voucher programme to help remove barriers to securing a bank loan the answer? Experts respond

Predictably, business commentators today spoke out about access to finance. The £30m Growth Voucher programme in England was designed to deal with one of the symptoms – businesses not providing lenders with what they’re looking for.

By testing “a variety of innovative approaches”, the Report stated, companies will receive limited access to help and external advice that could enable them to make a successful loan application to a bank or take on an employee.

But is the scheme what business needs? Here’s what some experts had to say in response:

Florian Richter, managing director, SumUp
“The majority of the small, independent merchants we work with will have been left cold by today’s budget. The economy is lying prone and the chancellor is still prescribing morphine rather than wielding the scalpel of genuine relief.

“Small businesses need access to funding far more than they need general infrastructure improvements, fuel duty freezes, or even job and corporation tax breaks. The government’s strategy of trying to get banks to loan more to small businesses is just not working. When Vince Cable’s British Business Bank eventually materialises it must be independent of the high street banks and it must take its cue from the private sector and offer easy-to-access financial products tailored for small businesses in the process of expanding.”

Ben Dowd, business director, O2
“Small businesses form the engine room of the UK economy, so initiatives like the small business Growth Voucher in the chancellor’s Budget are crucially important. But it’s not just the responsibility of government to support this important community of small businesses – big businesses have an important role to play too.

“For too long, business in the UK has worked in silos and it’s damaging our ability as a nation to innovate. If we’re to get our economy back on the road to growth, big businesses must take also responsibility by working more closely with small businesses to help them fulfil their potential.”

John Williams, managing partner, Kuber Ventures
“The government has addressed the elephant in the room, namely that the lack of commercial funding is stifling the future growth of the economy. The announcement that the government is to set out the lending plans for the new business bank is both a positive and an exciting opportunity for the government to make a real difference to the UK small business market.”

Paul Aitken, CEO and founder, borro
“The chancellor’s promise today to look at whether the Funding for Lending scheme can be extended is just not enough. Businesses have waited and waited for more decisive action and it looks like they’ll be waiting even longer. Hot air from the chancellor does not put pounds into the bank accounts of the nation’s small businesses.

Michael Wistow, head of tax, Berwin Leighton Paisner LLP
“The government is kicking the golden goose again with this spiteful and populist move against UK banks. Banks need to increase their capital to enable them to lend many multiples of it to kick-start the economy. Excluding banks from any corporation tax reduction through increasing the bank levy conflicts with the government’s stated aim of encouraging banks to lend.”

Anil Stocker, head of policy at the NGFC & co-founder of MarketInvoice
“Frankly, the failure to acknowledge the difficulties that SMEs face in accessing finance and to direct funding to the companies that can get it to them seriously weakens this budget. Mr Osborne has failed to confront the failure of Funding for Lending and other schemes. Mr Osborne should stop handing money to the banks that they won’t lend to small businesses, and start embracing the innovative new alternative lenders that are already doing just that.”

Clive Lewis, head of enterprise, ICAEW
“The key acid test for all these schemes is that they provide finance for business at a decent cost. Any finance needs to be paired with professional business advice. At the moment there are too many schemes, bewildering for small businesses.”

Jason Stockwood, CEO, Simply Business
“Once again, we are left disappointed on the issue of increased lending to businesses. I’m glad the government is “actively considering” extending the Funding for Lending scheme, but true action is needed to boost cashflow to the nation’s start-ups and smallest businesses.

“Elsewhere, the UK remains in a precarious position, and the reduced economic growth forecast to just 0.6 per cent is further proof that the Government’s overall strategy is not working. The economy is still three per cent smaller than when the downturn began. Fiddling at the margins will not fix this. We need investment in major new infrastructure projects, but we need these to start happening now, not in two years’ time. This is surely the only way to kick-start recovery.”

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