Small businesses gain £2bn - Expert comment
Tracy Ewen, managing director of IGF Invoice Finance, comments on news that the small business sector could benefit from an extra £2bn in growth capital:
“Draft legislation put forward by the Basel Committee on Banking Supervision would almost certainly reduce the number of small firms that receive bank funding. As a result, it seems like a sensible idea for banks to refer these businesses to alternative finance sources when they refuse credit.
This would give SMEs access to £2bn in alternative finance funding from initiatives such as P2P lending and crowdsourcing, as well as products such as invoice finance that can help free up cashflow within a business.
The UK’s banks will always be willing to provide credit to businesses that meet their lending criteria – but what about the rest? The banks now have an opportunity to help smaller businesses find the finance that they need – even if the bank can’t help them. The government should therefore encourage banks to accept this role, so that smaller firms can obtain the finance they need, at a price they can afford, with terms that match their specific needs.”