Bank Support for the UK Economy
The Business Finance Taskforce set up by the major UK banks and the British Bankers Association to review what the banks could do to support the UK Economy has recently issued its report. It has committed banks to 17 actions, across 3 areas – Improving Customer Relationships; Ensuring better access to Finance and to Provide better Information and Understanding.
“The proposed establishment of the Business Growth Fund is welcomed, although how far £1.5bn will go over a number of years must be questioned. The Fund will be targeting the needs of growing companies, typically with a turnover of between £10m to £100m and with equity funding requirements in the range of £2m to £10m, which will help larger businesses, but won’t address the needs of smaller Black Country businesses.”
“The Report also supports the continuance of the Enterprise Finance Guarantee Scheme to 2012, which aids companies with little security. No changes have been proposed to most borrowers’ main concern, being the ability for lenders to take additional security.”
“Another commitment which will be welcomed by many is to initiate pre re-financing talks 12 months’ ahead of any term loan coming to an end. Hopefully this will enable businesses to review the market options and opportunities and maximise the prospect of successful refinancing.”
“Overall the commitments made by the banks are a very positive way forward, but the proof will only be seen when the commitments are enacted at branch level locally.