Low awareness of some of the Government’s flagship lending programmes and alternative sources of finance are having a negative impact on the growth of small businesses and the economy.
Less than half of small businesses were aware of the Funding for Lending programme (42%) or the Enterprise Guarantee Scheme (42%) in the survey of 300 businesses by Touch Financial, the independent commercial finance broker.
But these figures were high compared to the awareness of the Regional Growth Fund (19%), the British Business Bank (10%), and the Prime Minister’s particular favourite, Supply Chain Finance (2%).
Two respondents even thought that the Bank of M&D (the fictitious Bank of Mum & Dad) was a genuine funding initiative! Only Start Up Loans, the young entrepreneur funding enterprise chaired by former Dragon’s Den star James Caan, emerged with any real merit,
being recognised by 62% of small firms.
Simon Carter, Director of Touch Financial, believes that there are too many schemes being poorly promoted: "Many of the initiatives are well constituted and well managed,” he says, “but what is the point if businesses don’t know about them?
"And why does the Government continue to launch new schemes rather than promoting viable alternatives such as factoring and invoice finance which already exist, and which are already part of the banking infrastructure?"
In the same survey, 69% of firms said that the apparent lack of alternative source of finance had hindered the growth of their business.
"The Government should stop obsessing with headlines,” Simon concludes, "And focus its energy and investment on promoting methods of funding that already exist, and which are already proven to help thousands of small businesses each year."