With small firms still struggling to access bank finance despite widely-publicised initiatives such as Project Merlin and increasingly vocal backing of small businesses, the Federation of Small Businesses (FSB) has urged the UK government to promote imaginative non-bank finance solutions, such as invoice finance, to help finance the economic recovery.
The FSB’s latest report entitled ‘Alternative Finance: Small firms and access to finance’ discusses the way in which other countries have seen success from varied and local routes to finance.
Examples of other countries the government was asked to learn from were Germany and the US, with one stark comparison particularly highlighting differences.
Between 2007 and 2010, there was a 24% decrease in successful loan applications for small businesses in the UK, compared to just a 9% decrease in Germany.
John Walker, National Chairman, FSB, said: "It is only when you compare bank lending in the UK to the situation in countries like Germany and the US that you can see the extent to which our banking system fails to deliver what small businesses need. Too much time has been spent tinkering with the existing system when it is perfectly clear that we need to develop alternative routes to finance.
Alternatives to bank lending?
One such alternative to bank lending is invoice finance, which provides cash based on the value of invoices a company is issuing.
Invoice finance facilities such as invoice factoring and invoice discounting work to unlock cash tied up in unpaid invoices, which, especially in this economic climate, can take up to 90 days before they are paid.
Browse our site to find out a bit more about how invoice finance can benefit your business or give our friendly staff a call to discuss a solution tailored to your needs.
As Skipton Business Finance is owned by a building society and not a high street bank, it means that the invoice finance solutions we provide, such as invoice factoring and invoice discounting, are set up in a completely different way to our competitors....