John Antunes, Director SME & Channels, SAP UKI, discusses financing for SMEs
With a recent SME snub in the budget, it's about time fast-growth SMEs received a well-deserved shot to the arm.
Queue Vince Cable. Thankfully, he's announced the first phase of the Government’s Business Bank initiative. It provides SMEs in need with access to finances to support their business. As it stands, £300 million of a total £1 billion has been made available specifically for SMEs.
And it couldn't have come at a better time. Especially as the Bank of England announced a drop in small business lending in the six months to February 2013, down from £19.7 to £18.4 billion. They've also said that, although lenders are expecting a significant increase in demand for loans in the next 3 months, they aren't going to increase credit loans.
The announcement also comes just as the business secretary has acknowledged that the Funding for Lending Scheme is not reaching the SME community. This is particularly important to us because we're talking about fast-growth. And sadly, the main barrier to growth is investment.
The good news is that the Business Bank will give more power to SMEs because it will allow businesses to choose the type of finance that suits them. We all know no two businesses are the same so this flexibility will be ideal, allowing a range of finance options to wet the whistle of a higher number of businesses.
On one hand, it is great to see that the Government is publicly hailing the important role of small and medium businesses in Britain’s economic recovery. Now, I know SMEs are sturdy and by no means is their success dependent upon government initiatives, but having public backing and funding is certainly a leg up while charging an assault for 2013.
Let's all hope this optimism and support for SMEs doesn’t run out of steam. Either way, it's recommended to keep doing what you're doing – think like a big business to achieve fast-growth and everyone will listen, not just Vince Cable.
