Calls for innovation in SME funding to sustain economic growth
Access to finance for SMEs is believed to be a major driver in the economic recovery, but more liquidity is needed in the supply chain according to one trade finance provider.
TradeRiver is part of a Cabinet Office-led initiative aiming to provide alternative methods of finance, but they believe the government still needs more assistance.
A surge in sustainable growth for these companies would represent a major boost for the economy as well as providing more jobs.
In order to promote this financial environment, a focus needs to be placed on ensuring growth in SMEs.
Currently, statistics from the European Commission show that micro-sixed businesses employ just 18% of the UK’s private sector staff, compared to the EU average of 29.5%.
TradeRiver Finance is providing input to the top levels of government in to the sorts of financial innovation that could occur in the future.
Supply chain financing forms a critical part of business for many SMEs in the public sector and a government focus is aiming to ensure more funding is available.
Failure to access finance can prevent business expansion, while it increases the likelihood of SMEs experiencing financial trouble.
Consequently, corporate restructuring and administration processes are more likely, which can impact a company’s reputation considerably.
TradeRiver has said that innovation could be a key part of ensuring that the correct finance reaches the right businesses and adds that it could lead to the desired levels of sustainable growth.
A key aspect of this is the ability of SMEs to trade, both within the UK and on an international stage – and they require finance to do this.
TradeRiver is one of several companies that aims to increase efficiency in the supply chain through additional funding which assists in the general running of business.
So far, around £20m of funding has entered the market in this fashion as SMEs receive some of the help they need to expand and innovate.
By Phil Smith