In light of additional funding to be made available to smaller UK businesses, EKM comments on how this affects not only independent merchants but also small businesses as a whole in the lead up to Brexit.
Last week, Business Secretary Andrea Leadsom met senior representatives of leading UK banks to set out additional support for SMEs ahead of 31st October and beyond.
She was joined by Micheal Gove, Chancellor of the Duchy of Lancaster, the Economic Secretary to the Treasure and Kelly Tolhurst, Small Business Minister. Business Secretary Leadsom commented, “SMEs are crucial to the economy and I want to make sure they are fully prepared as we get ready to leave the EU.”
Antony Chesworth, Founder and CEO of EKM comments, “The UK is a nation of shopkeepers and that statement is just as true today as it was 100 years ago. As a country, we need to be supporting small businesses and independents if we’re looking to further stimulate the UK economy.”
While there is currently £300 million approx of further headroom available to banks this financial year, the need to facilitate lending to viable small businesses that currently lack sufficient security against any borrowing has been long awaited from the British Bank’s EFG (Enterprise Finance Guarantee). This decision will help those smaller businesses potentially turn a ‘no’ credit decision into a ‘yes’ from major lenders.
“Our members have confirmed their commitment and capacity to support viable businesses with their cash flow needs. We would encourage all SMEs to talk to their finance providers now about how they can prepare for the UK’s departure from the EU” UK Finance CEO, Stephen Jones comments.
EKM’s CEO Antony also comments, “Making lending more widely available to small businesses and independent merchants could result in higher rates of success for UK start ups and could also help small businesses grow at a much faster rate.”
Alan Greensmith, Head of Sales at EKM comments, “The amount that SMEs contribute to the UK economy is 52% of all private sector turnover and this is something that needs to grow. Allowing more lending opportunity to those small businesses that may otherwise not be able to invest in their business will certainly help keep shops online and may even help to keep the high street lights on.”
“Supporting small businesses with this additional funding will certainly help them to not only expand their own business but also increase the amount of British talent and attract partnerships from all over the world. We’ve seen this demonstrated amongst our own customer base, in that growing businesses sometimes need additional funding to reach their next financial milestone.”
Business Secretary Leadsom also announced a new Business Finance Council, co-chaired by senior representative from the UK’s leading banks and alternative lenders. The council is set to identify and address any barriers faced by small to medium sized businesses when securing finance, specifically working capital and finance for investment.
Economic Secretary to the Treasury John Glen said, “As the City Minister, I will be working closely with lenders to make sure businesses can seize the opportunities of Brexit and continue creating jobs, growth and prosperity for the country.”
In the long term, under the Bank’s ENABLE Guarantee programme there is approximately £1billion of guaranteed headroom available and uncommitted. This programme will help reduce the amount of regulatory capital that participating lenders need to hold for their loans to small businesses.
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