Business secretary Vince Cable has launched a new taskforce charged with opening fresh channels of credit for Britain’s small businesses.
The business finance taskforce, headed by Legal and General chief executive Tim Breedon, will explore ways in which companies turning over less than £25m can secure the funding they need without a bank loan.
The taskforce, which will convene for a total of three months, will focus on debt and credit products, and examine specific options such as corporate bonds, crowd funding and peer-to-peer loans.
Discussing the new initiative, Cable stressed his eagerness to provide small firms with viable alternatives to bank lending. He said: "Businesses across the UK are still in many cases unhappy with the way they have been treated by banks.
"There are exciting innovations emerging that provide alternatives to bank lending. Businesses are selling bonds directly to their customers, missing out the middle-men. And peer-to-peer lending has opened up opportunities for savers to invest directly in the fortunes of UK businesses.
“I want to investigate and dismantle any barriers to these and future innovations."
The establishment of the taskforce was welcomed by CBI director-general John Cridland, who said: "Government has grasped the nettle in supporting industry to develop new and viable financing solutions for small and medium sized companies.
“There is huge growth potential in the UK's medium sized businesses, ready to be unlocked if we can provide them with long term capital to support their investment.”