SMEs need help and new ways to attract funding, says FPB

26/04/2011

Small and medium-sized enterprises (SMEs) need to find new ways to ensure they get finance to help them run their firms.

This is according to the Forum of Private Business (FPB), which said that there needs to be an improvement in access to funding from banks for firms.

Phil McCabe, spokesman for the FPB, said: "Small firms are still struggling to even get in a situation where they can negotiate funding from the major banks.

"The problem we are finding is the breakdown of information in terms of how risk is judged and how accurately risk is judged."

However, he noted that SME owners need to improve how they produce and present their financial information when applying for funding to reduce the chance of banks saying no.

Recently, the European Commission adopted the Single Market Act, which includes plans to improve access to funding for over 20 million SMEs.

The new legislation will put in place common principles for venture capital funds, which will mean companies in one member state can invest into another firm in a different country.

However, in the north-east SMEs are only a few weeks away from being able to access funds from a £5 million initiative. 

This will be available from the Finance for Business North East Micro Loan Fund (MLF), which will give nearly 700 firms in the region access to extra money.

Chief executive of North East Finance Andrew Mitchell told nebusiness.co.uk that the new service will enable companies struggling to attract finance a help out where it is needed.

Recently, Skills Minister John Hayes called on SME owners to take advantage of funding to support leadership and management training.

It was estimated that around 13,000 SMEs could benefit from taking part in the programme, which the government minister said would boost skills and develop businesses.

 Posted by Alison Smith