Member Article

The Business Bank: flexibility is key

John Antunes, regional director of SME and Channels, UK & Netherlands at SAP, looks at the launch of the first phase of the Business Bank.

This week, Vince Cable announced the first phase of the Government’s Business Bank initiative, which will provide SMEs struggling to get cash from their banks, with access to much needed finance to support their business.

This has come just at the right time as the Bank of England recently released the results of its latest quarterly survey of lenders, which revealed that gross lending to small firms fell to £18.4 billion in the six months to February 2013, from £19.7 billion in the preceding six month period.

As if SMEs aren’t already under enough pressure, the survey also found that lenders are expecting a significant increase in demand for loans from small businesses over the next three months. However, they do not plan to make more credit available to them.

The announcement also comes at a time when the business secretary has acknowledged that the Funding for Lending Scheme is not reaching the SME community. This is particularly significant to SMEs because 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. In this struggling economy, flexibility is key because no two businesses are the same. Fast-growth SMEs need to have a range of finance options that will allow their business to flourish.

In terms of awareness, it is great to see that the Government is publicly hailing the important role of small and medium businesses in Britain’s economic recovery. SME success isn’t completely dependent upon government initiatives, but having public backing and funding can often give start-ups and small businesses both the financial (and confidence) boost they really need. As we move further into 2013, I hope this optimism and support for SMEs doesn’t run out of steam – particularly when entrepreneurs and SMEs lie at the heart of Britain’s economic recovery.

This was posted in Bdaily's Members' News section by SAP .