The Parliament committee on Business, Innovation and Skills (BIS), has launched an inquiry regarding access to finance. According to information posted on the UK Parliament site, members are seeking to better understand how access to finance has developed since the financial crisis and what exactly the government may to increase the number of successful and high growth companies.
As with many nations, in the UK small business drives economic growth and accompanying jobs. Without well-developed channels to provide access to capital for firms in need of finance, the economy may sputter.
“After real difficulties during the credit crunch, business access to finance appears, superficially at least, to be back to normal. But small businesses, in particular, still say that access to finance is one of their biggest obstacles to future growth,” states Iain Wright, MP and Chair of the BIS Committee. “As a Committee, we want to look at how access to finance has changed since the end of the financial crisis. Among other issues, we will want to examine some of the alternative ways of raising finance, such as crowd-funding and peer-to-peer, and whether they are sufficiently well-regulated and monitored for companies to be confident in utilising them.”
The BIS Committee will be investigating the following points;
- How has the landscape for access to finance evolved since the end of the financial crisis?
- What have been the most successful Government policies to assist growing companies access private finance and where is there room for improvement?
- Does the UK have globally competitive markets / suppliers for financing (and debt financing) at 1) seed 2) venture and 3) growth stages?
- What steps could Government take to strengthen these systems?
- Are alternative methods of raising finance (such as crowdfunding and peer-to-peer lending) sufficiently well-regulated and monitored for companies to be confident in utilising them?
- What are the main improvements or interventions, in terms of finance, that the Government should make to achieve the objective of increasing the number of successful and high-growth businesses in the private sector?
Louise Beaumont, Head of Public Affairs at GLI Finance, commented on the inquiry;
“We firmly welcome the decision by the Business Select Committee to examine the state of access to finance for businesses since the start of the financial crisis. SMEs, in particular, have been hardest hit by a lack of funding from some of the biggest banks in the UK and have had £5.7 million withdrawn a day in small business overdrafts alone since 2011 – cutting available credit by £8.4 billion, a precipitous drop of 40% in four years, resulting in an estimated loss of £3 billion in growth to the UK economy,” said Beaumont. “The Committee is right in wanting to learn more on alternative ways of raising finance and we look forward to providing our input to the committee in order to help shape their final recommendations.”
Submissions from the public are encouraged. Interested parties may submit opinions here until February 10, 2016. A report should be issued later in 2016.