Business Bank Needs To Act Quick

Salloway Director Marc Ballard argues that proposals for a Business Bank need to deliver quickly in order to support the local manufacturing base which is primed for growth.

THE economy of Derby is spearheaded by global companies such as Toyota, Rolls-Royce and Bombardier but, under the umbrella of these well-known and respected names, is an extensive and strong network of small and medium-sized manufacturing firms that are being let down by the lack of financial credit available.

Over the past few years, there have been successive schemes aimed at increasing lending to business but, from a commercial property perspective, they have all failed to deliver.

How many Government-backed schemes have we had promising to increase lending to small and medium-sized business only for them to lose momentum and get lost in delivery?

There is a short-termism in lending that does not support business growth and investment in assets such as new property.

It seems that the Government may be becoming aware of these difficulties by launching a new bank.

The Business Bank is to be a stand-alone non-high street institution in which the Government has allocated £1 billion to increase the amount of lending to businesses.

This initiative appears to offer a glimmer of commercial realism from the Government, although the fact that it is not planned to come into being for another 18 months is disappointing.

It is urgently required now! And it needs to have a clear and transparent delivery mechanism that is available to all SMEs.

The key question is this will this help many small and medium-sized companies who have struggled for credit since the financial crisis?

The proposal to create a Business Bank appears to go well beyond a re-badging of existing schemes and with an emphasis on loans of 10 years and over.

This is the kind of funding that small businesses find hard to prise out of risk-averse banks.

So long as the Business Bank treats commercial property as an essential asset class for business expansion, I am very hopeful that sensible lending can return to the commercial property sector, allowing businesses to consider expanding into premises which allow them to flourish.

Through the Business Bank, it is essential that the Government puts its money where its mouth is on manufacturing and ensures that funding is made available to those Derby firms who are leading the way out of recession and helping keep the likes of Rolls- Royce, Bombardier and Toyota flying high, on track and on the road.

Anwar Hussain
Contact Details:
Tel 01283 500030

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