Image by Dr Craig via Flickr
It must be tiring for all those small to medium-sized businesses out there. Since the dawn of this recession economic experts have been saying that these businesses are the driving factors behind economic recovery and employment.
To quote Xavier Rolet, chief executive of the London Stock Exchange: “Companies that employ between ten and 250 people represent 12pc of companies but 36pc of economic contribution. This is where jobs will come from, not blue chips, and not Government. It’s the only sector that is going to work towards [reducing] unemployment.”
Yet, they get ignored again and again. The latest bad news is that credit easing threatens to ignore the smaller businesses. The Federation of Small Businesses (FSB) is warning that Osborne’s plans to buy corporate bonds in preparation for setting up a SMB bond market “would miss the very smallest of businesses”.
Yep, you’ve got it. The businesses that are most likely to positively impact employment figures, are most in need of funds and most likely to be refused funds. It’s enough to give small businesses a complex.
Programmes like Project Merlin, the Enterprise Finance Guarantee, and these latest plans aren’t enough. Instead, the FSB wants the government to be “creative”, “bold” and “innovative”. (Much like the entrepreneurs and small businesses it is seeking to support.) With banks being squeezed and restricting their lending to small businesses, and entrepreneurs afraid to approach banks, these ‘saviours’ of our economy are going to have to turn elsewhere. That elsewhere could be alternative lending – read this blog by Jos White (client) Do we really need banks anymore? to learn more.
On the plus side, at least their (the small businesses, that is, not the banks) plight is being recognised by a wide range of experts rather than the vocal few. Even if current solutions don’t go as far as some would like, let’s hope that with enough lobbying and consultation from these various parties some positive news will result.
In the meantime, small businesses will continue to struggle. But, let’s be very British about it and adopt the Downton Abbey approach to more bad news [paywall]: cup of tea, anyone?
And possibly even a biscuit.
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