Vince Cable has finally launched the first phase of his Business Bank project, aimed at helping SMEs access the finance they need to growth and flourish. Bank lending to businesses has been falling since the start of the recession and this has impacted on small businesses – many of them are finding it hard to access the funds they need to invest in their business and post sustainable growth.
Vince Cable has commented:
“Small and medium sized businesses are still telling me that access to finance is their number one problem, preventing them from investing and growing,” Business Secretary Vince Cable said.
“That’s why through the business bank we are developing a range of measures to provide businesses with the power to choose the type of finance that suits them.”
“Today’s £300 million boost shows we are serious about increasing competition and diversity in the business lending market. Establishing a lasting business bank institution is a long-term project, but getting this money reaching SMEs as soon as possible is the first step.”
Though the formal institution of the Business Bank won’t be operational until next year, the government is still trying to make sure that that there’s support available for small and medium businesses as soon as possible in advance of this. The first steps taken will aim to increase the diversity of business lending to counteract the lack of availability when it comes to traditional lending for SMEs.
The £300 million will be invested alongside private investors to help address long term gaps in the SME finance market. It’s the first part of the £1 billion of new capital to be invested in the Business Bank. While there’s still a long way to go, this is the first step in the right direction for Vince Cable’s big business plans for the UK economy.