Adam Tyler takes issue with the Bank of England governor’s recommendation for funding
There’s a recent Daily Express story about a businessman turned down for a loan to buy a van. Annoyed at the bank, he fired off a letter to the Bank of England and got a response from Sir Mervyn King pointing him towards a well-known Swedish bank.
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The spin of this article appeared to be: English banks don’t lend, so brokers and small businesses must travel abroad.
Coincidentally, the NACFB wrote an article for the Funding Britain’s Growth supplement in The Times on 7 March. Our message was, of course, you don’t have to go to Sweden to find a lender. There are plenty of business finance lenders across the UK. We work with more than 90 of them, and there are others who we’d welcome the chance to join forces with in the future.
However, with no disrespect to the governor of the Bank of England, a number of these lenders will be names that are not well known to him. And despite appearances, it’s easier and quicker to say "Handelsbanken" than to reel off the names of 90 alternative funders – and it makes a better headline.
According to figures quoted by Aldermore Bank, asset finance brokers reported 9% growth in Q4 2012 – strong evidence for the availability of funding. The lenders we work with report a will and an ability to increase the amount of funds they will make available. I am also seeing the first signs of an increased appetite for risk.
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By GlobalDataSo, as I phrased it in The Times, what we face is not so much a funding gap problem as a perception problem. We can’t expect or ask small funders to find a £1m advertising budget, so Sir Mervyn King will always reach for the bigger high street names, As this news item suggests, those names don’t come with quite the right connotations.
New start-ups and family businesses face the biggest problems sourcing funding. They’d be expected to know the least about the market and the available lenders, and that’s how it turns out. The FT reports 58% of micro-businesses actively seeking finance require an injection of working capital, compared to 48% of small businesses and 47% of medium-sized businesses. The problem is most acute in London and the south-east, where two-thirds seeking finance report that they are short of working capital,
These are the businesses which need the services of our brokers. We’re working with the Federation of Small Businesses’ 200,000-plus members, reminding them that the lending is out there. And now we’re getting recognition in the national press. This is important if we want to bang the drum for commercial finance brokers.
They know there really isn’t any need for small business owners to pack their bags and book flight tickets to Scandinavia. The finance is right here in the UK.
Adam Tyler is chief executive of the National Association of Commercial Finance Brokers
