Business minister stresses importance of financing for SMEs

IN: Business news

The business minister has highlighted how significant funding is for small and medium-sized (SMEs) enterprises trying to grow in the current financial climate.

undefinedMichael Fallon has claimed it is crucial for banks to lend to small firms to support their development and the wider economy.

As such, Mr Fallon has issued a letter to a number of banks to encourage them to play their part and increase their use of the Enterprise Finance Guarantee.

Government figures suggest lending levels have been "disappointing since peaking in 2009" when the value of EFG loans hit £48.9 million.

Although there has been a rise in lending in the past five years, Mr Fallon is concerned banks and businesses are failing to take full advantage of the money that is available.

As such, the government has published official figures on EFG lending, which reveal that 590 loans were drawn taken 2009, rising to 2,999 this year.

However, the government expects this to fall to 1,834 by the end of 2013, raising concerns that lending is weakening.

Mr Fallon said: "By being more transparent on lending figures, the government is giving SMEs the information to best secure the finance they need to grow their business.

"It also enables new market entrants to identify opportunities and drive improved competition and choice."

In August 2012, the government also launched the Funding for Lending Scheme, which is aimed at increasing the level of capital available to SMEs.

It is paramount for small businesses to look at all their options when laying out plans for development, with government-backed initiatives on hand to fuel growth.

Aldermore has already lent more than £1 billion to SMEs since its launch in 2009, with that figure set to grow in the New Year.

As such, it could be the perfect lender for a business hoping to making 2013 it’s best year yet.

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