Lenders need to ‘get clever’ and innovate more in the way they provide finance in order to aid SME growth, according to the Financing Britain’s Growth whitepaper. The whitepaper explores the many challenges currently facing UK SMEs and outlines the prerequisites for business growth as expressed by leading businesses and business bodies. Chaired by Professor Nigel Waite, head of the Financial Services Research Forum, the ThinkTank drew together industry representatives including the Department for Business, Innovation and Skills, the British Business Angels Association, KPMG, the Asset Based Finance Association, the Financial Services Research Forum and various successful SMEs.

Challenges facing SMEs identified in the whitepaper include:

• SMEs’ reluctance to invest in their businesses or take on more debt
• Cashflow problems resulting from lengthening credit periods and increasing late payments
• The increasing risk of insolvency as deferred tax debts start to bite

The whitepaper also outlines important considerations for lenders:

• Lenders must be more clever and innovative with funding solutions
• SMEs are seeking increasingly flexible finance to match their business needs
• Reliability and service are becoming more important than price in funding relationships

Peter Ewen, Managing Director of Venture Finance, comments:

SMEs are facing unprecedented challenges as they seek to forge a path to recovery and lenders need to play their part. The central issue is ensuring businesses have access to reliable and responsive finance, which means confidence in financial institutions must be restored. Priorities have shifted from cost to service and an ongoing dialogue at a personal and local level is essential to a trusting relationship – this is what our ThinkTank and whitepaper aims to address.

Read our ThinkTank Special Report

To view our suite of accompanying videos click below:
• Access and Trust
• Working Capital and Stability
• Certainty and Relationship