Small Business Still Need More Financial Help Industry News 5th February 2016 | By Liberty According to the British Chambers of Commerce (BCC), there is a structural failure in the way in which the government is helping to provide financial aid to small businesses in the UK. The latest figures suggest that things need to change if British business is to grow and improve. Not a New Problem According to the director general of BCC, John Longworth, this has been an issue for many years but it has been amplified by the effects of the banking crisis. He believes that the government’s lack of financial support is the reason why the United Kingdom has been unable to “nurture a British Samsung or Google.” Big British Business Being Bought One of the biggest problems, Longworth has pointed out, is that anytime a British business that looks promising arises it is snapped up by private equity firms or large international competitors. This brings up the question as to whether the country would benefit more from foreign investment or a strong national industry. Longworth suggests that the UK needs to try and become a “national incubator” for small firms, helping them grow into medium-sized enterprises and then large corporations. He argues that this is what the government needs to do in order to invest in Britain’s future, as it is these businesses that will be the “UK’s wealth creators of tomorrow.” Bank Lending Down Despite several initiatives from the government encouraging banks to lend to small businesses, there has actually been a steady decline in the number of loans provided to small firms. This goes to show that the Funding for Lending Scheme has simply not worked as it was intended, but why? Experts believe banks are reluctant to hand out loans to small companies fearing that they will be unable to repay them – the same situation that caused the financial crisis in 2007. Credit Conditions Improving Several lenders have claimed that the reason they have cut their lending is because SMEs do not match the criteria they have laid out. However, a government spokesperson has made a statement claiming that this does not reflect reality as credit conditions have drastically improved since 2007. According to the government assessment, more lending should be provided to small businesses at cheaper loan rates, but as it currently stands many firms are raising capital with costly credit cards and overdrafts. Something Needs to Change Until the government starts offering their own loans, bypassing banks, getting funding will continue to pose difficulties. One solution is to approach commercial finance brokers who are able to find you the funding you need at the best possible rates. By looking at the whole market, they have access to a huge range of lenders allowing you to get away from high street banks and find lenders happy to help you grow. Get in touch today to discuss your options with us.