In Her speech to Parliament today (4 June), the Queen announced a bill that could offer SMEs that have been turned down for finance by conventional banks a financial lifeline.
In what is essentially Parliament’s to-do list for the last session before next year’s general election (May 2015), the speech included the Small Business, Enterprise and Employment Bill (England and Wales).
The speech included the following passage covering the Bill: “Legislation will be introduced to help make the United Kingdom the most attractive place to start, finance and grow a business. The Bill will support small businesses by cutting bureaucracy and enabling them to access finance.”
This wide ranging legislation includes a raft of bills proposing to make it easier for small businesses to access finance and remove red tape.
The bill says small firms will be given fair access to government and other public sector procurement, and a ‘register of beneficial ownership’ will outline who owns and controls British companies.
It is also anticipated that the Bill will include laws that compel banks who turn down businesses for loans to inform them of alternative sources of finance, such as invoice and asset finance.
Commenting on the Queen’s Speech, Tracy Ewen, managing director at IGF Invoice Finance, said: “Forcing banks to promote alternative lenders when they can’t provide funding themselves is a logical step to help keep the recovery on track.
“It will also go a long way towards publicising the wide array of options that are available to firms, some of which aren’t so well known to UK SMEs.
Rhydian Lewis, founder and CEO of peer-to-peer lender RateSetter, said: “This damaging disconnect between credit-hungry SMEs and traditional sources of finance is impacting on the UK economy. It is encouraging to see the Queen’s Speech highlighting the potential of alternative lenders to step into this gap.”