Startup Observer.com
  • Home
  • Industries
  • Innovation
  • outsourcing
  • Business
  • Finance
  • Headlines
  • Opinion
  • News
Home Finance A new loan scheme: Will the SME sector finally get the security it needs?
Finance

A new loan scheme: Will the SME sector finally get the security it needs?

By:  Chirag Shah, CEO and Founder of Nucleus Commercial Finance

by uma April 18, 2022
April 18, 2022
gawdo

With the fallout from Brexit, global supply chain and labour issues, lingering Covid-19 cases and financial pressure on day-to-day costs caused by the geopolitical conflict – there’s been a lot for business owners to come to terms with.

However, news of progressive discussions taking place this past week between the government and city bank executives regarding a new guaranteed loan scheme suggests that the calls for greater sustained support for SMEs are now being heard. 

Currently, there are around 5.5 million small businesses active in the UK, and entrepreneurial hunger shows no signs of abating. A study into UK self-employment trends found that over the past two years, the number of people considering starting their own business grew by 36%. In January 2022, monthly searches for ‘how to start a business’ were 45,000. This number was 33,000 in March 2020.There has been a 10% increase in searches regarding the process to secure a business loan.

Should the scheme get the go-ahead, this would provide a much-needed financial safety net for millions of people who would otherwise struggle to secure the financing needed to support their business efforts. The SME sector now also accounts for around half of turnover in the UK private sector. This scheme would not only provide finance for business owners on a personal level but also protect the financial contribution this vital and innovative sector delivers to our future economic growth. 

Indeed, it’s been reported that 25% of SMEs would struggle to launch new products and services without first securing finance. Aside from immediate recovery post-pandemic, the top three reasons business owners cited as to why access to permanent lending streams is so important, included to increase their headcount and/or hire new people (30%), to launch new products and/or services (25%) and to commission a corporate marketing and/or advertising campaign (24%). From these findings, it is clear where simple access to funding could really help support budding businesses meet their objectives this year onwards. 

As part of the recent discussions, special attention has also thought to have been paid to how best the scheme will support growth in UK businesses, including those in “levelling up” areas of the North, rather than purely cover survival or recovery from the pandemic. A laser-focus on this is crucial. Our own research found 47% of SMEs believe regional inequalities are impacting the financial health of their business, while 42% said they are affecting their ability to get a loan from a bank.

But there could be delays ahead. Covid bounce back loan repayments have had a bad rap recently, and with each new fraudulent case reported, there is a real risk the scheme never actually sees the light of day. To turn talk into action, many will be expecting a timeline to get the scheme off the ground, clarity over who and how it will be regulated and clear guidance on criteria for prospective borrowers. Indeed, when it comes to the levelling-up agenda, only a third of SMEs in our survey believe that the government will actuallydeliver and this new scheme risks being faced with the same pessimism. Using technology to assist in the rollout of this scheme and make the application process as smooth as possible (perhaps via a portal) would be one simple solution to speed up the decision-making process. We pride ourselves on our speed and pragmatism when it comes to granting finance and with finances being so tough across the board right now, transparent communication and efficiency are vital.

www.gawdo.com
Share on FacebookShare on TwitterShare on Linkedin
0 FacebookTwitterPinterestEmail
previous post
Britain gives first European approval to Valneva COVID shot
next post
Ukraine says first civilians killed in Lviv, fighters cling on in Mariupol

You may also like

ALQUITY AND SPOUTING ROCK ASSET MANAGEMENT JOIN FORCES...

May 13, 2022

Griffin submits application for UK banking authorisation, hitting major...

May 13, 2022

Shares drop, yields shoot up after U.S. inflation...

May 11, 2022
Editorial & Advertiser disclosureEditorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
gawdo.com
https://www.gawdo.com
  • About us
  • Advertising & Terms of Use
  • Contact Us
  • Privacy Policy

@2021 - All Right Reserved.


Back To Top
Startup Observer.com
  • Home
  • Industries
  • Innovation
  • outsourcing
  • Business
  • Finance
  • Headlines
  • Opinion
  • News
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT