Small businesses 'need more diverse lending'
The UK's small businesses have been described as one of the keys to the UK's economic recovery, yet concern remains that they are finding it too difficult to get the funding they need from traditional financial institutions.
According to David Davis and John McFall - both politicians and board members of the New City Network - UK firms need to find innovative ways to get moving without relying on the continually risk-averse banking industry.
In an open letter published in the Financial Times, the pair declared that for British business "to catch up we need a growth agenda that creates jobs and a diverse financing system that breaks the banks' stranglehold on lending. New research shows how to do so".
As recent job metrics have shown, financial jobs are being created in non-traditional areas and if plans to increase the base of funding available to small businesses go ahead this trend could be set to continue.
According to research from the New City Network, 93 per cent of businesses not given loans only approached banks in their search for funding, rather than diversifying their potential options.
With UK businesses boasting some £750 billion of deposits on their balance sheets, Mr Davis and Mr McFall feel the obvious move is to see larger companies invest in partnership with small to medium-sized enterprises (SMEs) and start-ups.
"Debt can be used very successfully and access to the bond market for more mature SMEs should not be overlooked, but we have become too focused on one type of funding," they added.
The pair concluded their letter by calling for the financial services industry and policy makers in government to make major strides in diversifying the sources of funding available to firms or see the economy continue to stumble over the coming years.
Lending to businesses fell by £5 billion in the three months to February of this year, according to the Bank of England's latest report, highlighting the scale of the problem facing the UK.
Signup to receive the latest discipline specific articles
Related articles
Teaser
Financial ServicesContent Type
General
17/05/23
Summary
In the past few years, we have seen an exceptionally significant shift towards the emergence of Private Credit Strategy. According to SP Global, private credit grew tenfold between 2011 and 20
by
Cliodhna Lynch
Teaser
Investment and AdvisoryContent Type
General
22/11/21
Summary
With COP26 recently taking place in Glasgow, climate change is very much top of mind for individuals and businesses alike. We are all looking for small ways in which we can red
by
Alastair Paterson
Teaser
HRContent Type
Diversity
14/09/21
Summary
How failing to recruit and retain a diverse workforce may lose you the next big mandate, a contribution from Chelsea Bruno and Meera Savjani on behalf of Women in Fund Finance. Although hard to beli
by
Mellani Georgiou
Related jobs
Salary:
£65,000 - £80,000 per annum
Location:
Paris, Île-de-France
Industry
Investment Management
Qualification
None specified
Market
Financial Services
Salary
£80,000 - £100,000
Job Discipline
Investment - Buyside
Contract Type:
Permanent
Description
A Global Investment Manager who is expanding their Private Credit Strategy in Paris. They are one of the leading European credit specialists.
Reference
BBBH179912
Expiry Date
01/01/01
Author
Ashwin AnilAuthor
Ashwin AnilSalary:
Negotiable
Location:
Manchester, Greater Manchester
Industry
Professional Services
Qualification
Finalist / Newly qualified
Market
Professional Services
Salary
£40,000 - £50,000
Job Discipline
M&A
Contract Type:
Permanent
Description
Marks Sattin are delighted to be partnered with a growing Corporate Finance team, where they are looking to recruit an M&A Executive/Associate based in the Manchester.
Reference
BBBH164540
Expiry Date
01/01/01
Author
Daniel HortonAuthor
Daniel HortonSalary:
Negotiable
Location:
Manchester, Greater Manchester
Industry
Professional Services
Qualification
Fully qualified
Market
Professional Services
Salary
£60,000 - £70,000
Job Discipline
M&A
Contract Type:
Permanent
Description
Marks Sattin are delighted to be partnered with a leading Advisory boutique, where their Transaction Services team are looking to recruit a Executive and Manager into the team based in Manchester.
Reference
BBBH187465
Expiry Date
01/01/01
Author
Daniel HortonAuthor
Daniel HortonSalary:
Negotiable
Location:
London
Industry
Professional Services
Qualification
Fully qualified
Market
Professional Services
Salary
£100,000 - £125,000
Job Discipline
M&A
Contract Type:
Permanent
Description
Marks Sattin are delighted to be recruiting for an opportunity to lead and develop the Lead Advisory - M&A / Corporate Finance team within an established and highly reputable M&A Advisory boutique.
Reference
BBBH164804
Expiry Date
01/01/01
Author
Daniel HortonAuthor
Daniel HortonSalary:
Negotiable
Location:
London
Industry
Professional Services
Qualification
Fully qualified
Market
Professional Services
Salary
£50,000 - £60,000
Job Discipline
M&A
Contract Type:
Permanent
Description
Marks Sattin are delighted to be partnered with a growing Finance Advisory firm based in London for the recruitment of a Qualified Accountant to operate as a Finance Consultant within the team.
Reference
BBBH167494
Expiry Date
01/01/01
Author
Daniel HortonAuthor
Daniel HortonSalary:
Negotiable
Location:
London
Industry
Professional Services
Qualification
Fully qualified
Market
Professional Services
Salary
£70,000 - £80,000
Job Discipline
Restructuring
Contract Type:
Permanent
Description
Marks Sattin are delighted to be currently recruiting for one of the UK's market leaders in Restructuring and Business Recovery.
Reference
BBBH161717
Expiry Date
01/01/01
Author
Daniel HortonAuthor
Daniel HortonSalary:
Negotiable
Location:
London
Industry
Professional Services
Qualification
Fully qualified
Market
Professional Services
Salary
£100,000 - £125,000
Job Discipline
Restructuring
Contract Type:
Permanent
Description
Marks Sattin are delighted to be currently recruiting for one of the UK's market leaders in Restructuring and Business Recovery.
Reference
BBBH181665
Expiry Date
01/01/01
Author
Daniel HortonAuthor
Daniel Horton