The 2012 Budget is due to be announced tomorrow, with many people looking for solutions for small business funding. The Forum for Private Business has called for means to tackle lending and late payment in order to help small businesses with their cash flow. It also highlights the need for more alternative funding methods for SMEs, enabling businesses to get the funding they need.
The Forum wants to enable businesses to have alternative choices to traditional bank lending. They believe that boosting alternative funding solutions and making them more available to small business can go a long way to plugging the funding gap that many businesses are experiencing.
The National Loan Guarantee Scheme, a government initiative which aims to provide £20bn to small businesses over the next two years, also needs more standardised organisation and data. It highlights that there’s little point these schemes being available if business aren’t aware of them or able to take advantage of the funding on offer.
The Forum welcomes this government scheme, but stresses the need for it to cater for the smallest companies as well. With the average small business seeking around £20 000, it’s imperative these companies can take advantage of such a scheme as well as their larger compatriots.
Funding alternatives need to come into more direct competition with the big banks, something that can only happen with more transparency and openness about the funding process. This will help open up options for businesses, giving them scope to solve their cash flow problems when traditional routes are unsuitable.
The Forum sees the NLGS as a crucial step in the right direct, but the Budget tomorrow needs to go further. Alex Jackman, Senior Policy Advisor to the Forum for Private Business, commented:
“Small business owners are being expected to drive the economy forward yet find that relentless cost increases, mounting late payments and continued credit restrictions severely hinder their ability to control cash flow. Cash is the lifeblood of any business and there must be definite action in the Budget if we are to mend this cash flow crisis among small firms.”