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Lenders must innovate and ‘get clever’ to aid SME growth, say business leaders
- SMEs face cashflow problems but are reluctant to take on new debt - Insolvencies expected to increase as tax burden grows - SMEs seeking increasingly flexible finance - Reliability and relationship becoming more important than price in lending
The whitepaper, summarising an annual Thinktank organised by leading Invoice and Asset Based Lender, Venture Finance, combines the views of the Department for Business, Innovation and Skills, the British Business Angels Association, KPMG, the Asset Based Finance Association, the Financial Services Research Forum and various successful SMEs.
Challenges facing SMEs identified in the whitepaper include:
SMEs’ reluctance to invest in their businesses or take on more debt
Cashflow problems resulting from lengthening credit periods and increasing late payments
The increasing risk of insolvency as deferred tax debts start to bite
The whitepaper also outlines important considerations for lenders:
Lenders must be more clever and innovative with funding solutions
SMEs are seeking increasingly flexible finance to match their business needs
Reliability and service are becoming more important than price in funding relationships
Peter Ewen, Managing Director of Venture Finance, comments, “SMEs are facing unprecedented challenges as they seek to forge a path to recovery and lenders need to play their part.”
Ewen continues, “The central issue is ensuring businesses have access to reliable and responsive finance, which means confidence in financial institutions must be restored. Priorities have shifted from cost to service and an ongoing dialogue at a personal and local level is essential to a trusting relationship – this is what our Thinktank and whitepaper aims to address.”
David Smy, of the Department for Business Innovation and Skills, comments, "Ensuring sustainable and secure sources of finance for business is central to the Coalition Government’s ambition for growth, and we are committed to discussing the challenges and opportunities in this area with a broad spectrum of interested parties. This roundtable was an excellent opportunity to discuss access to finance in general, and invoice and asset based lending in particular, with a panel representing a wide range of practical experience and expertise."
Video highlights of the Thinktank debate are available via Venture Finance’s YouTube channel.
About the whitepaper
The Financing Britain’s Growth whitepaper is available in full here. Videos of the debate can be viewed via the Venture Finance YouTube channel. Videos can also be embedded into most HTML websites, CMS systems and Wordpress-based sites using the following HTML codes:
Video 1: Access and Trust
Video 2: Working Capital and Stability
Video 3: Certainty and Relationship
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About Venture Finance
Venture Finance is an award-winning Premier Invoice and Asset Based Lender, established in 1989. Venture was one of the first independent invoice financiers to offer Asset Based Lending (ABL) in the UK in 1990 and the first authorised independent invoice financier to provide both the Government’s Small Firms Loan Guarantee Scheme and the Enterprise Finance Guarantee scheme.
Venture provides Factoring, Invoice Discounting, Export Finance, Structured Finance and numerous related services to start-ups through to £150m organisations. Providing consistent support via its 200+ staff and 11 regional offices, Venture helps clients manage cashflow, refinance, restructure, fund business opportunities and expansion, purchase new equipment and finance M&As. Venture is part of the ABN AMRO group and ultimately owned by the Dutch Government.