The government must move quickly to get the new business bank helping credit-starved SMBs, the Forum of Private Business (FPB) says.
Vince Cable, business secretary and Lib Dem MP for Twickenham, launched the first phase of the government's business bank yesterday, with £300m on offer alongside funds from private investors, out of £1bn allocated to the business bank in the 2012 Autumn Statement.
Alex Jackman, head of policy for the FPB, said if proper proposals were submitted, some of the money could help struggling smaller businesses, including VARs, very soon.
"There is no doubt the money is desperately needed in the economy right now, so we urge the government to get the cash out to where it is needed most by working with organisations to ensure bids are successful. We certainly do not want to be seeing any of this money sitting untouched come February next year," Jackman said in a statement.
The business bank plan is meant to help SMBs in particular that have been struggling to access finance. However, it is not entirely new lending, but consolidates existing schemes as well, Jackman conceded.
"There is a pressing need to target those businesses that have viable propositions but to which the banks will not lend for oblique credit-scoring reasons. So overall, while we welcome this news, the overriding message has to be that this money needs to be out the door fast, and not getting jammed in it," he concluded.
Cable (pictured, right) said in his announcement that the coalition is developing "a range of measures" to help businesses access finance, and is welcoming proposals from a wide range of lenders. All measures being taken to improve business credit add up to nearly £4bn, including the £1bn for the business bank, he claimed.
"We are serious about increasing competition and diversity in the business lending market. Establishing a lasting business bank institution is a long-term project, but getting this money reaching SMEs as soon as possible is the first step," Cable said.
Lender applications will be received until midday on 28 February 2014. However, they are being asked to submit expressions of interest before midday on 22 May 2013, with the first funds becoming available to SMBs in autumn.
A request for proposals and guidance documents for lenders is available from the Department of Business, Innovation and Skills via the Gov.uk website.
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