Britain’s Small Business Minister, Mark Prisk, today hosted a Summit for Small Business and set out a cross government package of measures to help the five million small and medium companies in this country grow and boost enterprise across the UK.
These businesses will be vital to economic growth as they are at the heart of the economy, providing 60 per cent of jobs and half of GDP. But despite 66 per cent of small and medium-sized enterprises (SMEs) being ambitious to grow within two to three years, just 20 per cent expand their workforce each year.
To help translate aspiration into action today, ministers from Department for Business, Cabinet Office, Treasury and Communities and Local Government have announced three major policies to:
· improve access to finance;
· make it easier to do business with the public sector; and
· allow social tenants to start up their business at home.
Lord Young has today taken up the role of Enterprise Advisor to the Prime Minister, to propose new ways of encouraging business start-ups, reducing burdens, maximising procurement opportunities and engaging with small businesses.
Government achievements for small business are published in a document today entitled: 'Backing Small Business’.
Minister for Business and Enterprise Mark Prisk said: “As a former small business owner I know how important our SMEs are to the growth of this country. I entered government with the goal of making this the most entrepreneurial decade in our history and I’m confident today’s announcements will help make that a reality.”
Improving Access to Finance
The Government is committed to ensuring there are a wide range of finance options available to small business looking to expand. In July the green paper, Financing a Private Sector Recovery, was launched and received over 180 submissions. Today the Business Secretary Vince Cable and Chancellor George Osborne respond to the consultation and announce several major policies.
- We will continue the successful Enterprise Finance Guarantee (EFG) for the next four years, making around £2 billion available to viable small companies without a credit history or collateral. This will provide support to 6,000 SMEs a year. We will also make it easier for small and specialist lenders, such as Community Development Finance Institutions to lend under EFG, supporting companies in disadvantaged communities.
- The government will commit a further £200m to Enterprise Capital Funds supporting equity investments in the highest growth potential businesses over four years, and it’s anticipated the first of the new funds will be investing early in the new year.
- To encourage ‘business angel’ investments government welcomes the joint bid of business angels and the Government’s SME investment arm, Capital for Enterprise, for a co-investment fund as part of the Regional Growth Fund to support angel investments into high growth potential, early stage SMEs, particularly in areas worst affected by public spending cuts.
- The government will also work with banks on several areas launched in their response to the green paper, the Business Finance Taskforce. This includes the £1.5 billion Business Growth Fund, mentoring and a new lending code.
Business Secretary Vince Cable said:
“Small businesses are critical for growth in this country. But to expand they need access to a range of finance options. The government is doing its part by supporting a further £2 billion of bank lending through the popular Enterprise Finance Guarantee which will provide real help to viable small companies looking to grow. Now we need the banks to play their part and increase normal commercial lending to get the economy growing.”
Chancellor of the Exchequer George Osborne said:
“Ensuring that viable businesses have access to suitable and diverse sources of finance is crucial for helping to get the economy growing again. The government is dedicated to creating the conditions for strong, sustainable growth, by ensuring the UK has competitive, dynamic and efficient markets that provide the right support to business. Today’s announcements are important steps to help this happen.
“These measures will ensure stable financial conditions for business, a more competitive and transparent banking system and access to a more diverse range of sources of finance that suits their needs. The private sector is also taking steps to provide a diverse range of finance options for businesses – a development which is welcomed by government.”
For further information and to download 'Backing small business', click here.
