On the banks: Good posturing, but not the right points
Posted: Mon 20th Jan 2014
On Friday, I tuned into BBC Live Online, excited to hear Ed Milliband's vision for small business and enterprise in the UK. I was disappointed.
Don't get me wrong - he's a good performer. He cracked jokes, knew the journalists by name, he appealed to the crowd. What he didn't appeal to was the real issues affecting small business.
Emma Jones (@emmaljones) is a small business expert and founder of Enterprise Nation
This maniacal focus on changing the banks - and using small business as the justification - is misplaced. Access to bank funding is just not a complaint I hear from the thousands of people I meet and interact with throughout the year who are starting and growing a business.
You may say these conversations are purely anecdotal but there are figures also on offer.
In a growth survey we carried out in August 2013, 95% of respondents confirmed they were looking to grow in the next 12 months. When asked how they would finance this growth, the results were as follows:
Working capital: 55%
Personal savings: 40%
A grant: 14%
Loans from friends and family 9%
External inbvestment eg angel 7%
Bank loan 6%
The bank solution came in the bottom two results. Most business owners are looking to grow through bringing in more cash to the business from making sales and securing new customers. In my view, this is most definitely the right way to grow.
What should be remembered is that business owners are entrepreneurial. If they can't get funds from the bank, they will go elsewhere.
StartUps are turning to StartUp Loans and crowdfunding to raise money and profile, and growing businesses that need a cashflow injection are going online to websites such as Funding Circle, IWOCA, Everline and Zopa. They make decisions fast and so long as you pay back on time, you don't pay over the odds to get the cash you need, when you need it.
I would ask, therefore, that politicians look to the issues that matter most to small business. How the tax system can be simplified, how to break into new and international markets, how to secure partners with whom to innovate and how to access top notch advice and mentors to grow.
Now that's a speech I'd tune in for.