So you’re trying to get a company started, or to get your existing venture to grow a little bit beyond that £100k turnover mark. After today, Cable’s your man.
The so-called business bank that he announced many moons ago finally took effect today, with the money that it provides being matched at least pound-for-pound by private sector investors. The idea is that it will try to meet the credit needs of healthy, smaller businesses without giant high street banks being their only option.
It’s hoped that the scheme will cultivate growth amongst small-time lenders – anything from disruptive banks to private asset-based lenders who want to tie up some of their cash in something other than a low-interest bank.
But critics have already piped up with their condemnations of the scheme, with many pointing to how other such initiatives (i.e. the ‘Funding for Lending Scheme’) have taken so long to get off the ground or get any cash moving around.
Nonetheless, Cable said: ‘Small and medium-sized businesses are still telling me that access to finance is their number one problem, preventing them from investing and goring. Today’s £300m boost shows we are serious about increasing competition and diversity in the business lending market.’
In his little nugget of PR-smothered rhetoric, Cable also hinted that a ‘long-term’ business bank ‘institution’ was in the offing, but that the existing iteration was just the first step.
Importantly, today’s announcement is just the first tranche of a £1bn commitment of government cash (presumably then matched by another billion from private lenders), as the business bank will not be in full operation until next year.
It’s hard to know whether this latest wheeze will have any effect, but goodness knows the banks are keeping those purse strings tight. At least Cable is making an effort. And in the mean time, if you're an SME and want to get your hands on some of this cash, the money is being dispatched to commercial lenders (private investors) who have to bid for the cash first. The ones who are approved get the cash on condition that they will the lend it to SMEs - there's still some waiting to do yet...