Getting finance flowing to UK’s smaller companies

The Treasury Select Committee is currently conducting an inquiry into financing UK SMEs. Newable has submitted a number of ideas....

Select Committees work in both the House of Commons and the House of Lords. Their role is to check and report on areas ranging from the work of government departments to economic affairs. The result of inquiries they conduct are public and require a response from or influence the policies of the government.

The Treasury Select Committee is taking a broad look at the state of the market for SME finance. It is considering the various sources of funding available to small businesses and whether the currrent regulatory framework provides adequate protection.

Newable has submitted written evidence as part of the inquiry. Newable notes that access to finance is the most serious issue for smaller businesses up and down the country. Ensuring that businesses refused finance by retail banks are all referred to alternative providers is a vital first step. We recommend introducing affordability rules and other measures to ensure that SMEs are able to borrow sustainably. We recommend that, where appropriate, the funding comes with mentoring to help ensure that businesses gain the maximum benefit from the loans issued. Whilst simple lending is adequate for many smaller businesses, the continued availability of long term patient capital equity investment is crucial to the growth and development prospects of high potential, knoweldge intensive businesses.

The full response can be viewed here.