Forum urges business to take back control over access to finance
The Forum of Private Business is urging businesses to respond to the Governor of the Bank of England's comments in the latest Financial Stability Report that, "the determinant of credit growth in the economy will be credit demand as opposed to constraints over credit supply".
Reinforcing that there is sufficient access to finance for small businesses, the Small Firms Minister, Anna Soubry, reported to the Business Innovation and Skills Select Committee that there is a limited awareness of alternative finance providers and an over-reliance on their local high street bank.
Ian Cass, Managing Director of the Forum of Private Business stated, "The banking system is much more robust than it was a decade ago and whilst the banks may have failed small firms in the past, there is good evidence that there is now an adequate supply of finance to support growth, not just from the banks, but also from the new challenger banks and peer to peer lenders."
"But businesses still seem reluctant to shop around and are unaware of where they can find information on the best financial products for their business."
"We endorse the Minister's view that more needs to be done to make it much clearer to businesses what the options available to them are. The Forum is taking a lead on this and has put together a package of services designed to help businesses take back control of their finances."
The Forum is looking to provide support for businesses right through the business cycle, teaming up with businessmoney.co.uk to provide an online business account service, with an alternative funding platform, Funder Finder to help businesses to find the most suitable sort of funding and with Close Brothers, a long established lender to the business sector.
"In the post EU era the health of our 5 million small businesses is critical to the overall strength of the UK economy. This requires a well structured financial sector and at the Forum we are committed to play our part in making this a reality" added Ian Cass.
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Notes to Editors
The new services offered through the Forum are:
• Specialist finance from Close Brothers.
• Funder Finder - an alternative funding platform helping businesses identify the right type of funding for a business.
• Yourbusinessmoney.co.uk providing business owners with information to choose the best business account for their organisations.
The Forum also offers members free access to Business Money so that they can keep up to date with the latest thinking in the financial sector, follow market trends and identify best funding options.
Background data from the Small Business Survey, Department of Business Innovation and Skills published May 2016
22% of SME employers reported that access to finance was a major problem, compared to 33% citing late payment and 49% referencing regulations and red tape.
In 2015 32% of business owners considered that they were strong when it came to obtaining finance and 19% reported that they were poor. In 2012 18% reported that they were strong, compared to 42% stating they were weak.
In 2015 81% obtained the finance they were looking for and 8% did not obtain any. 11% reported that the decision was pending.
Reasons for not accessing finance were: Did not want to take on additional risk 53%; Thought it would be too expensive 45%; Thought would be rejected 37%; Decision would have taken too long/too much hassle 31%; Now is not the right time because of economic conditions 29%; Did not know where to find the appropriate finance 20%.