Vince Cable still unhappy with SME funding
Filed under: Small Business News — Alan @ 7:37 am
For small and medium sized businesses access to business finance is still an issue. All over the UK SMEs are having problems as banks and other types of lending institutions find they have to turn down loan applications. Even though the country is officially back from the recession many of the problems that were present at the peak of the financial crisis have not really been resolved.
Vince Cable, Business Secretary recently revealed that he demanded banks release information on how their directors’ pay is somehow linked to small business lending. Some banks were much more open than others when it came to their finances.
Santander and Lloyds have been more than up from with what they are doing. But the problem is the government does not have sufficient powers to penalize those that do not comply. Nevertheless banks receive letters explaining the importance of lending to the small enterprises and also requesting transparency in their efforts with financing.
It remains to be seen if the governments pressure will be enough to ease the lending problems or not but experts are already calling for alternative methods of alleviating the financial stress. Churchouse Finance Planning’s director Keith Churchouse suggested the tax system needs amending to allow for companies to stay afloat and avoid the need for loans all together.
Alternative sources have been called on by the Institute of Directors and the Federation of Small Businesses to be explored. The thought is if wealthy investors will invest in SMEs in exchange for tax assistance it could alleviate the current strain on banks. The fact is for some time to come firms will continue to face funding hardships.
