Alongside the Chancellor’s Autumn Statement, there were several associated releases published by the Exchequer’s office. Louise Beaumont, Head of Public Affairs at GLI Finance and a frequent commenter on policy issues regarding SME’s and the economy, has shared some thoughts regarding specific announcements presented by Osborne and the Treasury.
In re-affirming the intent to launch Innovative Finance ISA’s that will allow for holding P2P assets, Beaumont stated;
“We firmly welcome the decision by the government to allow crowdfunded debt securities to be held in the New Innovative Finance ISA from April 2016. This is a significant step forward for alternative finance and we look forward to working with government on the implementation of the legislation to ensure we capitalise on this opportunity. For example setting a number of industry standards would help maximise the ISAs potential, whilst sufficiently protecting retail investors and ensuring that alternative finance continues to help fuel growth in the UK economy.”
Commenting on the Government’s announcement to support SMEs in accessing finance through the appointment of designated CRAs, Beaumont believes this is a positive step for small business;
“These measures are another key milestone in helping level the playing field between traditional lenders and alternative finance providers. They are further testament to the industry’s success in reshaping the credit ecosystem to the benefit of UK SMEs and the provision of equal information to all finance providers will further accelerate the opening up of previously untapped sources of funding. However, better access is only a partial solution and more must be done to tackle the lack of awareness amongst SMEs of the benefits alternative finance can provide which is set to cost the economy up to £20bn by 2020. More must be done to address this issue in order to support the implementation of the Small Business Enterprise and Employment Act and ensure that high growth SMEs crucial to the economy are able to thrive.”
The Chancellor gave special attention the North today. Beaumont embraced the concept of the Northern Powerhouse Investment Fund.
“SMEs in the North are having their overdrafts slashed at twice the rate of SMEs in London – 25% of SMEs in London have had their overdrafts cut or taken away completely, it’s 55% in the North. The need to deliver more targeted investment and support to the region has never been greater and we strongly welcome the creation of the Northern Powerhouse Investment Fund. Too often SMEs are left high and dry by their bank; worried about approaching them for fear of the dreaded ‘overdraft review’, deterred from applying for a loan, and then left so disillusioned that they fail to even consider alternative providers. The Small Business Enterprise and Employment Act is a helpful start, but the Government must look at how it can raise awareness of alternative finance options and the benefits the industry can deliver in providing the right type of finance at the right time. A failure to do so will risk derailing George Osborne’s economic express train before it’s even left the station.”