Small business finance problems investigated

A new initiative has been launched to get banks and financial institutions lending to small businesses again.

As a result of organisations pointing out that finding finance for small firms was 'vital to reinvigorating the economy,' business secretary Vince Cable and chancellor George Osborne have launched the 'Financing a Private Sector Recovery' paper, in a bid to get lending moving and to encourage investment.

The paper explores a variety of finance options, including more use of equity and encouraging venture capital and business angels to invest in a wider range of businesses. It explains how the government itself could intervene and also aims to increase transparency in bank loan applications and to foster competition between banks and financial institutions. 

Mr Cable said, “I’ve heard the problems businesses are facing in getting bank loans up and down the country. They need innovative ways to access finance from other sources to grow our firms and economy.
That’s why this green paper is so important as we look to help viable firms get the money they need,” added Mr Cable.

Commenting on the paper, director general of the British Chambers of Commerce, David Frost, said, “It is vital that the right approach is taken when dealing with the access to finance question.