The British Business Bank (BBB) has found UK SME’s main demand for finance has switched from working capital to investing in new fixed assets, in a testimony contributed to the government’s report on SME business finance.
The testimony and its proceedings were part of the ‘Government Support for Business’ report from the Business Innovation and Skills department.
It focused on four main areas where SME business finance needed support: access to finance; exports and manufacturing support schemes; communicating and coordination of support; and in the case of asset finance, a unified signposting to help SMEs navigate the field of alternative funding.
When asked about access to funding availability for SMEs in the UK market, BBB chief executive Keith Morgan couldn’t give a clear picture, but said; "Our surveys and contacts show that whereas two years ago the major demand for finance was for working capital, the major demand for finance is now for investing in new fixed assets.
"That, of course, is very consistent with a sense that there are growth intentions among small businesses. […] Overall, the trend looks like it is improving, but we still think that there are some significant gaps in the marketplace, which is what has been driving us in terms of where we are focusing our activities for the first year
Stephen Sklaroff, director general of the Finance & Leasing Association (FLA), a contributing member to the process, said: "There is much to welcome in the report, not least the British Business Bank’s comment to the committee that the major demand for finance is now for investing in new fixed assets.
"Whoever wins the next election, the BBB will have an important role to play in improving signposting for companies seeking this kind of finance, which is precisely what leasing and Hire Purchase provides.
"A comprehensive online directory to help point SMEs to the most appropriate finance would be a helpful step."