News Archive - September 2012
Business bank : Further details unveiled - 25.9.2012
Business secretary Vince Cable has unveiled further plans for a £1 billion Government-backed business bank to help small and medium sized businesses access finance.
It hopes that the backing will attract additional private sector capital funding which could support up to £10 billion in new lending to businesses that have struggled in difficult lending conditions since the 2008 recession.
The new single institution will aim to bring together the numerous existing state-backed finance support schemes for businesses, and create a single port of call for information and advice.
Making the announcement, Vince Cable said: "For decades British industry has lacked the sort of diverse, long-term finance that is quite normal elsewhere. We need a British business bank with a clean balance sheet and a mandate to expand lending rapidly and we are now going to get it."
It will aim to boost the market through lending to high growth companies and those that particularly require support such as manufacturers and exporters.
The long term-lending - the BBC speculated it will provide loans with around a 10 year maturity - will operate via existing banks and institutions and aim to be open for business within 18 months.
Director general for the British Chambers of Commerce (BCC), John Longworth, welcomed the announcement, saying the bank could be a 'key pillar of UK competitiveness in the years to come.'
"While a £1bn commitment is an important first step, Whitehall must ensure that the business bank gets off the ground with an independent mandate and a mission to support growing companies," he said.
The plans to 'shake up the lending market' were initially announced earlier in the month when Chancellor George Osborne told the BBC's Andrew Marr Show that 'weakness' in the banking system was one of the UK's biggest problems.
Business groups had initially been sceptical of the plans which came less than two months after the announcement of another initiative, the Funding for Lending Scheme, which had already replaced the National Loan Guarantee scheme unveiled in March.
Further details regarding the business bank are expected to be included in the Government's Autumn Statement on 5 December.
It hopes that the backing will attract additional private sector capital funding which could support up to £10 billion in new lending to businesses that have struggled in difficult lending conditions since the 2008 recession.
The new single institution will aim to bring together the numerous existing state-backed finance support schemes for businesses, and create a single port of call for information and advice.
Making the announcement, Vince Cable said: "For decades British industry has lacked the sort of diverse, long-term finance that is quite normal elsewhere. We need a British business bank with a clean balance sheet and a mandate to expand lending rapidly and we are now going to get it."
It will aim to boost the market through lending to high growth companies and those that particularly require support such as manufacturers and exporters.
The long term-lending - the BBC speculated it will provide loans with around a 10 year maturity - will operate via existing banks and institutions and aim to be open for business within 18 months.
Director general for the British Chambers of Commerce (BCC), John Longworth, welcomed the announcement, saying the bank could be a 'key pillar of UK competitiveness in the years to come.'
"While a £1bn commitment is an important first step, Whitehall must ensure that the business bank gets off the ground with an independent mandate and a mission to support growing companies," he said.
The plans to 'shake up the lending market' were initially announced earlier in the month when Chancellor George Osborne told the BBC's Andrew Marr Show that 'weakness' in the banking system was one of the UK's biggest problems.
Business groups had initially been sceptical of the plans which came less than two months after the announcement of another initiative, the Funding for Lending Scheme, which had already replaced the National Loan Guarantee scheme unveiled in March.
Further details regarding the business bank are expected to be included in the Government's Autumn Statement on 5 December.
Autumn Statement 2012 date set as Wednesday 5th December 2012 - 12.9.2012
This year's Autumn Statement will take place on Wednesday 5th December, Chancellor George Osborne has announced.
The Chancellor is expected to give an update on public finances and the state of the economy alongside the latest economic forecasts from the Office for Budget Responsibility (OBR).
Last year's Autumn Statement saw a series of announcements designed to boost business growth and finance, including credit easing through the National Loan Guarantee Scheme and Business Finance Partnership.
This year, these schemes could be rolled into one in what is being put forward as a business bank specifically to lend more money to small and medium sized businesses.
We will be covering the Autumn Statement live on the 5 December so keep an eye on our website for up to date information and our round-up of the key announcements.
The Chancellor is expected to give an update on public finances and the state of the economy alongside the latest economic forecasts from the Office for Budget Responsibility (OBR).
Last year's Autumn Statement saw a series of announcements designed to boost business growth and finance, including credit easing through the National Loan Guarantee Scheme and Business Finance Partnership.
This year, these schemes could be rolled into one in what is being put forward as a business bank specifically to lend more money to small and medium sized businesses.
We will be covering the Autumn Statement live on the 5 December so keep an eye on our website for up to date information and our round-up of the key announcements.
Small firms 'vital' to economy and employment, says business group - 11.9.2012
Small businesses are 'vital' in aiding economic recovery and slowing the rate of unemployment in the UK, the Federation of Small Businesses (FSB) has said.
Research tracking data from the start of the 2008 recession found that up to nine in ten (88 per cent) unemployed people find jobs in the private sector; by either setting up a new business or working for a small and medium sized enterprise (SME).
According to the findings, a quarter (24 per cent) of those out of work found employment with a micro business, 27 per cent with a small firm and 17 per cent started their own business.
Figures from the Office for National Statistics (ONS) revealed that 2.56 million people in the UK remained unemployed in the three months to June.
Although this number was down on the previous quarter, eight per cent of the population remain out of work; a figure the FSB said was still 'stubbornly high.'
National chairman for the FSB John Walker, said: "The numbers speak for themselves - small firms are responsible for creating the majority of jobs and are more likely to take on people out of work, including those that have been out of work for some time."
With SMEs accounting for 99 per cent of businesses in the UK, The FSB is now calling for the Government to urgently review measures to help boost small business growth and reduce unemployment.
In particular, it wants to see the National Insurance Contributions holiday extended to allow more firms to take on staff. The scheme currently exempts qualifying new businesses from certain employee contributions.
Elsewhere, it also called for a review of the New Enterprise Allowance Scheme to allow those claiming Jobseeker's Allowance access to business funding from day one of unemployment. Applicants with a viable business plan can currently only apply for the funding after six months on Jobseeker's Allowance.
Walker added: "In the current economic climate, with costs increasing and cash-flow tight, small firms need all the help they can get."
"Giving people the ability to start their own business and small firms the incentive to take on staff through extending the National Insurance Contributions holiday will help to boost economic confidence and growth, which is vital."
Research tracking data from the start of the 2008 recession found that up to nine in ten (88 per cent) unemployed people find jobs in the private sector; by either setting up a new business or working for a small and medium sized enterprise (SME).
According to the findings, a quarter (24 per cent) of those out of work found employment with a micro business, 27 per cent with a small firm and 17 per cent started their own business.
Figures from the Office for National Statistics (ONS) revealed that 2.56 million people in the UK remained unemployed in the three months to June.
Although this number was down on the previous quarter, eight per cent of the population remain out of work; a figure the FSB said was still 'stubbornly high.'
National chairman for the FSB John Walker, said: "The numbers speak for themselves - small firms are responsible for creating the majority of jobs and are more likely to take on people out of work, including those that have been out of work for some time."
With SMEs accounting for 99 per cent of businesses in the UK, The FSB is now calling for the Government to urgently review measures to help boost small business growth and reduce unemployment.
In particular, it wants to see the National Insurance Contributions holiday extended to allow more firms to take on staff. The scheme currently exempts qualifying new businesses from certain employee contributions.
Elsewhere, it also called for a review of the New Enterprise Allowance Scheme to allow those claiming Jobseeker's Allowance access to business funding from day one of unemployment. Applicants with a viable business plan can currently only apply for the funding after six months on Jobseeker's Allowance.
Walker added: "In the current economic climate, with costs increasing and cash-flow tight, small firms need all the help they can get."
"Giving people the ability to start their own business and small firms the incentive to take on staff through extending the National Insurance Contributions holiday will help to boost economic confidence and growth, which is vital."
Businesses urged to appeal 'unfair' finance - 7.9.2012
Small businesses that feel their application for finance has been unfairly rejected should take advantage of the appeals process, the Forum of Private Business (FPB) claims.
The campaign comes after the latest quarterly 'SME finance monitor' from the British Bankers' Association (BBA) revealed that 49 per cent of all new small business loan and overdraft applications since January 2012 have been turned away.
Since April 2011 small businesses with a group turnover of up to £25 million have been able to appeal a negative funding decision for any reason. According to the BBA, 39.5 per cent of rejected funding applications have been overturned in the first year of appeals being available.
Commenting, the FPB's chief executive Phil Orford said: "As of May 2012 almost 40 per cent of lending appeals had been completely overturned - or 2,177 small businesses initially denied finance, but this is clearly just the tip of the iceberg for business owners who believe they have unreasonably turned them down for finance. It is important to shout from the rooftops that there is an appeals process, that it works, and that small businesses who feel aggrieved should use it."
The number of funding rejections comes despite a number of Government initiatives to get banks to lend to businesses, including the National Loan Guarantee Scheme, and Project Merlin, which set lending targets that most banks failed to meet.
The BBA survey also revealed that 41 per cent of SMEs have injected personal funds into their businesses in the last year, suggesting that while banks claim there is a lack of demand for finance business owners are actually looking elsewhere.
Orford added: "Banks often say there is a lack of demand but it is evident that, while they understand the importance of banks, business owners are becoming alienated by mainstream lenders and are looking elsewhere - including their own personal finances. It is also important to support alternative funding providers to help them compete in small business finance markets dominated by the big banks."
The campaign comes after the latest quarterly 'SME finance monitor' from the British Bankers' Association (BBA) revealed that 49 per cent of all new small business loan and overdraft applications since January 2012 have been turned away.
Since April 2011 small businesses with a group turnover of up to £25 million have been able to appeal a negative funding decision for any reason. According to the BBA, 39.5 per cent of rejected funding applications have been overturned in the first year of appeals being available.
Commenting, the FPB's chief executive Phil Orford said: "As of May 2012 almost 40 per cent of lending appeals had been completely overturned - or 2,177 small businesses initially denied finance, but this is clearly just the tip of the iceberg for business owners who believe they have unreasonably turned them down for finance. It is important to shout from the rooftops that there is an appeals process, that it works, and that small businesses who feel aggrieved should use it."
The number of funding rejections comes despite a number of Government initiatives to get banks to lend to businesses, including the National Loan Guarantee Scheme, and Project Merlin, which set lending targets that most banks failed to meet.
The BBA survey also revealed that 41 per cent of SMEs have injected personal funds into their businesses in the last year, suggesting that while banks claim there is a lack of demand for finance business owners are actually looking elsewhere.
Orford added: "Banks often say there is a lack of demand but it is evident that, while they understand the importance of banks, business owners are becoming alienated by mainstream lenders and are looking elsewhere - including their own personal finances. It is also important to support alternative funding providers to help them compete in small business finance markets dominated by the big banks."
