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Business Growth Fund launched, but FSB warns it is ‘unlikely to help small firms’
The majority of small firms seeking affordable finance will miss out on a new £2.5 billion funding scheme, the Forum of Private Business (FPB) has warned.
Launched by the Government and the British Bankers’ Association, the Business Growth Fund will see banks invest between £2m and £10m into participating firms in return for an equity stake ranging from 10% to 50%.
However, with the fund only accessible to businesses with an annual turnover of between £10m and £100m, the FPB claims that it will do little to address the problems encountered by smaller firms.
‘The Business Growth Fund aims to bridge the clear gap in funding for ‘high growth' firms identified in the Rowlands Review back in 2009 and so is certainly a welcome step and one that is long overdue,’ commented Alex Jackman, FPB senior policy adviser.
‘But we cannot allow this to overshadow the real problem – the lack of affordable lending being made available by banks to start-ups and other small businesses – those that are not eligible to benefit from the fund.’
Its thoughts were echoed by the Federation of Small Businesses (FSB), which warns that ‘without sustainable lending to viable small businesses, growth, employment and capital investments will all suffer - as will the economy generally.’
Dubbed the ‘modern day 3i', the fund is being backed by five of the largest banks in the UK - Barclays, HSBC, Lloyds, RBS and Standard Chartered.
Further information can be found at: www.businessgrowthfund.co.uk