Government and IOD chief at odds over finance for small firms
CONFLICTING claims emerged yesterday over ease of access to finance for small and medium-sized firms (SMes) after a Scottish Government survey revealed that the vast majority of businesses were receiving the funding they were applying for.
The SMe Access to Finance 2012 report found that 87 per cent of the firms applying for funding – including bank overdrafts, loans and leasing agreements – were able to access all the money they were seeking, up from 79 per cent last year.
The results of the survey, carried out among just over 1,000 businesses, also pointed to a decrease to 15 per cent in the number of companies that were rejected outright by lenders.
Finance secretary John Swinney said that although it was ing agreements for projects with a potential to produce up to 1,600 MW in the Pentland Firth and Orkney waters.
But, as Niall Stuart, the chief executive of industry body Scottish Renewables points out, getting the finance to scale up these projects to commercially viable arrays is a “major challenge”, not to mention the “massive costs to connect these projects to the grid”.
So where is the money going to come from? There are some technology developers that have got at least some support and investment from big private firms such as Alstom, Rolls Royce and Siemens.
The sector will have to rely on a range clear lending criteria were stricter now than in the past, the figures showed that accessing finance was “possible with the right proposition”.
But David Watt, executive director of the Institute of Directors Scotland, described the figures as “very surprising”.
he said: “They do not support the anecdotal evidence that we have had from Scottish businesses looking for funding.”
Although the figures seemed to show that SMes were being supported by financial institutions, Watt said there was a need to be “very cautious and not take anything for granted”.
“It is important that lending continues in order to allow Scottish companies, and indeed the Scottish economy, to grow and prosper in the years ahead.”
Swinney said the Scottish Government would continue to look to encourage more investment. “We have set up the Scottish Investment Bank, which is open for business and investing in innovative growth companies. We also remain committed to maintaining the most supportive tax environment anywhere in the UK, retaining the small business bonus scheme which has either eliminated or substantially reduced business rates for two out of every five commercial properties in Scotland.”
Separately, John Cridland, CBI director-general, said in a speech yesterday that the level of finance available in the economy must increase if the UK is to secure sustainable growth.
he proposed measures including easing liquidity rules to help banks lend more and changing solvency rules to enable insurance companies to invest.
Cridland said it was vital to boost non-bank finance to midsized businesses and create a “one-stop-shop” to make it easier for firms to access a range of SMe lending schemes.
“The fact is we need to raise levels of finance in the economy to support our growth aspirations. We need an action-thisday approach, and the lesson so far is that we must not allow good intentions to be lost to poor implementation. I want to see urgency to stop the recovery being choked off by a lack of finance.”