With the Budget revealing new measures to bolster small business lending, many business owners and finance experts are hoping that the lending environment for SMEs will start to show some improvements. Measures such as the Business Bank will aim to reinvigorate lending by having a dedicated bank for small business lending, but alternative finance will also be getting a boost.
Small and medium businesses are going to receive a £70 million lending boost through a new government initiative. This will aim to bolster the alternative finance market, making the funding environment more diverse. This will increase the availability of funding for a range of businesses who might otherwise struggle to access traditional finance measures.
Three lenders – Market Invoice, URIA and Beechbrook Capital – will split more than £30 million of government money to offer funding to more businesses than other forms of lending can. Each lender has committed to attracting extra private sector investment, with the total investment expected to top out at more than £70 million.
Vince Cable has commented: “A lack of access to finance is still choking off too many small businesses, preventing them from growing, taking on new staff or investing in new equipment. We are taking a range of actions to support SMEs and shake up business finance markets, including through the new business bank. Today’s £30 million announcement is an important boost for non-traditional lenders with creative and innovative solutions. It will increase competition and create a more diverse and balanced market for business lending.”
This all means that the finance landscape will hopefully become a more diverse place. With measures such as invoice finance becoming ever more popular, hopefully more small businesses will start to access measures of finance outside traditional lending options – and this government initiative could be another step in the right direction.