Comment by Evette Orams, Managing Director of Hilton-Baird Financial Solutions, on the latest government announcement regarding credit easing:
Whilst we applaud George Osborne’s announcement yesterday regarding the government’s new “credit easing” proposals, particularly in light of the most recent bank lending statistics showing that SMEs’ access to credit is continuing to tighten, it appears to have confirmed the gravity of the current economic situation.
Rumours have been circulating that we could be in for a double-dip recession – with the troubles in the Eurozone and rising business insolvency figures providing further cause for concern. The announcement of this corporate bond scheme, combined with Osborne’s admission that further Quantitative Easing measures could be around the corner, goes to show that the government is acutely aware of the plight of the lifeblood of the UK’s economy: the SMEs.
In the long term we believe that this new scheme will be fruitful. However, in our view, the UK’s small business community needs real and tangible help sooner than the time it may take to finalise and implement such a scheme.
We therefore urge business owners to act sooner rather than later and consider the forms of funding already available to them as, given the delays experienced in the roll out of the Enterprise Finance Guarantee initiative back in 2009, the actual implementation of any new scheme is likely to take some time.
In contrast to the wider bank lending scene, invoice finance has seen significant growth over the same period, as demonstrated by the Asset Based Finance Association’s latest quarterly statistics reporting advances to its members’ clients rose by 12% to £15.8 billion in Q2 2011 on an annual basis, proving that funding is indeed available if you know where to look.