05 Sep 2018
For any adviser with an interest in SME funding, be it bridging, development, asset or pure commercial finance, it will be worth keeping your eyes on the sector, because we are reaching a very important point in its development and you can be a part of it.
As you know, I have long been a champion for greater access to commercial finance, so that SME’s, which bring such value to the UK economy, can get access to the funding they need to expand, thereby creating the virtuous circle that brings greater prosperity and jobs to the UK.
The Access to Finance initiative will improve the flow of finance available to SME’s and their access to it.
As a very proactive lobbyist for the business lending community and talking to government, regulators, lenders and service providers on behalf of the sector, it is important that all advisers, who are at the coalface of providing funding services, have their voices heard in the debate.
Following an event in the House of Lords that I chaired earlier this year, we responded with an Interim Report to the Treasury Select Committee on their Access to Finance paper. After these initial discussions, it was decided to launch a lender survey; this follows a survey of the SME community initiated around a month ago. This will mean that we can put together a unique report with input from the SME community as well as those that provide funding to business across the UK.
For you as advisers, our work will influence the way that government responds to the needs of the sector. Our goal is to lobby successfully to ensure that SME’s are not only able to access funding both now and in the future, but also that SME’s importance to the growth of the economy is not forgotten in the eyes of government.
This is an independent survey to make sure that anyone can have their say about the industry in which you are involved.
Advisers are at the forefront of helping SME’s negotiate the right finance and therefore your contribution to this debate is very important. The outcome of our lobbying depends on being able to articulate precisely what needs to be done and, as an adviser, one of the most helpful actions you can take to support what we do, is to get involved.
So, please do look at the survey, which can be accessed at: SME Lending Survey
Concerns over the availability of business finance after Brexit, at this point, seem to be unfounded. The current situation is that there has never been so much choice for SME’s and unless there is a seismic shift, that situation is unlikely to change radically in the aftermath of our departure.
What concerns the Government and has been alluded to by the British Business Bank, is the possible effect of Brexit on SME’s wishing to access funding. In the BBB’s latest survey on SME funding, 70% of SME’s would rather forego growth than borrow. Brexit, as we all know, is being blamed for most things at the moment, but at any time in the business cycle, confidence can turn negative.
A survey by Wesleyan Bank suggests that SME’s don’t have a good enough understanding of the funding options that are available and the BBB also concluded that ‘lack of awareness and understanding of financial products can also reflect a more fundamental apathy and perceived absence of relevance to business owners .’
The Bank went on to say that ‘there is a proportion of smaller businesses who have a perception that obtaining finance takes a lot of effort. This is a dynamic that can be changed as we do not want those seeking finance to cite that the hassle of borrowing as the reason for not planning to get funding, despite having a need to do so.’
This is where I believe brokers can have the greatest effect, by showing SME owners that they can not only obtain finance, but also that, with a professional adviser to help them with the heavy lifting, they can improve the take up of finance for growth.
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