SMEs still lacking understanding of available finance
Plenty has been done by the government to tackle finance issues faced by small and medium-sized enterprises, but there is still scope for improvement according to the National Audit Office (NAO).
They say the initiatives currently in place need to work as a more unified programme to ensure that SMEs can take advantage of the opportunities available to them.
The Business Bank was launched in October 2013 and will operate as an independent entity at some point in 2014 and the Department for Business Innovation and Skills (BIS) used it as an opportunity to study finance issues facing SMEs.
Part of this includes looking into whether SMEs might need an additional £22 billion of finance by 2017, on top of what they are already receiving.
BIS and the Treasury can use large-scale data sets to inform their decision-making, including Bank of England credit reports and information from the British Bankers’ Association.
Helping SMEs to keep improving
The report discovered that many authorities have teams to deal with enterprise policy, but that there are no formal research programmes joining the departments together with others, such as HMRC, who also have an interest in SMEs.
As a result, the Treasury is keen to ensure that there are plenty of available routes towards finance that are available for SMEs, while BIS will then target certain parts of the market.
SMEs are viewed as being a vital segment to the gradual recovery of the economy and a lack of finance could see many smaller firms struggle to keep up with any rapid improvements.
Therefore, ensuring finance is available to lessen the likelihood of businesses entering into company voluntary arrangements and administration is seen as a priority.
The NAO discovered that BIS-led schemes, including the Enterprise Finance Guarantee and Start-Up loans, have provided direct support to almost 6,000 firms in 2012-13.
Amyas Morse, head of the National Audit Office, said: “Access to finance is a significant and enduring problem for many small and medium-sized businesses.”
He added that managing all the available schemes as a unified portfolio and highlighting what they aim to achieve would help to give many SMEs a better understanding.
By Phil Smith