Small businesses may be overlooked by the new Business Growth Fund designed to support companies in the UK, Bibby Financial Services have said.
In response to the unveiling of the £1.5bn fund, the specialist invoice financier has expressed concerns over what is being done to specifically support small companies fearing that the fund will target larger firms.
The fund is to be provided by a group of six leading high street banks, who formed a taskforce earlier in the year to help improve equity for small businesses. However, the financial services have called to question whether this fund will benefit small firms.
Edward Rimmer chief executive of Bibby Financial Services, said: "Vince Cable has demanded that the banks take action to increase financial support for UK businesses, so I applaud the British Bankers’ Association (BBA) and the UK’s leading banks for creating the Business Growth Fund. This aims to provide £2m to £10m of equity for companies with a turnover of between £10m and £100m.
“However, the fact that this initiative only aims to provide funding for companies with a significant turnover raises the fundamental question - what is being done to support smaller firms below this turnover bracket at a time when they need it most?”
According to Bibby, in the current economic climate it is vital that businesses feel financially supported. Furthermore, the financiers have advised that business owners look to alternative forms of funding.
“It is evident that initiatives such as the Enterprise Finance Guarantee (EFG) scheme have not gone far enough to help smaller firms to date and at this crucial time we wish to remind businesses that other forms of funding, such as invoice finance, are viable solutions, which have been supporting businesses through good and bad," added Rimmer.
© Crimson Business Ltd. 2010