Department for Business, Innovation and Skills
 Printable version
|
 E-mail this to a friend
|
Vince Cable and George Osborne launch ‘Financing a Private Sector Recovery’ paper
Vince Cable and George Osborne today launched a paper to encourage an industry-led recovery by addressing the problems businesses face accessing finance.
The government recognises that access to finance is critical for businesses to survive and grow and that small and medium-sized companies face particular challenges. The current system is not adequately delivering finance to small, growing businesses that are vital to the future of the economy.
The Business Secretary and the Chancellor want to work with business and the financial community to ensure that access to finance is not a barrier for companies looking to invest and boost the growth of the economy.
The paper, ‘Financing a Private Sector Recovery’, sets out the range of finance options for different sized businesses, explores where the market is failing to provide and if there is a role for government intervention. It launches an intensive discussion on how business and the government can work together to produce a diverse, competitive and sustainable financial environment.
Business Secretary Vince Cable said:
“If we don’t anticipate and tackle finance barriers now we could face a big problem in the future. Left unchallenged, a lack of accessible finance for businesses could prevent the recovery accelerating.
“I’ve heard the problems businesses are facing in getting bank loans up and down the country. They need innovative ways to access finance from other sources to grow our firms and economy. That’s why this green paper is so important as we look to help viable firms get the money they need.”
Chancellor of the Exchequer George Osborne said:
“Accessing finance continues to be a challenge for many British businesses.
“As the economy recovers, it is crucial to ensure that the supply of finance supports rather than constrains demand and business confidence. If businesses are to play their part in promoting economic recovery it is important that they are able to access a diverse range of finance choices in a stable macroeconomic environment.”
The paper explores every major finance option, including more use of equity and encouraging venture capital and ‘business angels’ to invest in a wider range of businesses, and a responsible return to securitisation. The paper sets out options for the industry, such as an insolvency moratorium on companies restructuring their debt, increasing transparency in bank loan applications and fostering competition between banks and finance institutions.
The paper also addresses the success of existing government schemes, such as the Enterprise Finance Guarantee, and whether they should be improved or extended.
But it is emphasised that industry and market-led solutions are the preferred response to any market failures. Only where appropriate will the Government assist in providing solutions, in conjunction with business.
Notes to Editors
1. Businesses can respond to specific questions in the paper and provide solutions and feedback to business.finance@bis.gsi.gov.uk
2. BIS' online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.
Contacts:
BIS Press Office
NDS.BIS@coi.gsi.gov.uk
Miles Erwin
Phone: 020 7215 5981
miles.erwin@bis.gsi.gov.uk
