In response to the announcement of Vince Cable and George Osborne's "intense discussion" on the issue of access to finance for small businesses, Edward Rimmer CEO of specialist invoice financier Bibby Financial Services, believes that if consultation by the Asset Based Finance Association is taken on board, more businesses will understand the benefits invoice finance presents for real funding and growth opportunities:
"The previous Government talked about reviewing and centralising finance options for businesses so I applaud the present Business Secretary and Chancellor for tackling this issue and consulting financial bodies such as ABFA, on where there might be an opportunity for the wider finance market to step in and help where the banks are failing businesses.
"It is perhaps too early to say if Mr Cable and Mr Osborne will consult the finance industry at the right level, or even represent the high level of support available from invoice finance specialists such as Bibby Financial Services within the Green Paper, but what they must consider in this 'discussion', is what is feasible and primarily, what is the best solution for businesses of every size in the UK.
"The use of equity and venture capital to fund small businesses is not the most flexible or accessible solution for firms needing to get cash flowing in the short-term, and indeed build up funds for long-term growth. Dragon's Den is not a funding stream accessible to all and this "business angel" mentality will not necessarily match businesses' funding requirements in the way that a funding stream like invoice finance can.
"As members of ABFA, we will be promoting the benefits of invoice finance and indeed leasing options to Mr Cable and Mr Osborne, but the Government needs to wholeheartedly review every single financial option open to businesses - not just smaller companies - and be firm with the banks about becoming more flexible with the solutions they provide, whether they are under the Government's control or not."
Posted on 18 August 2010