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27/07/2010 - Coalition Duo Launch Dynamic Paper Addressing Private Sector Funding Needs

Business Secretary, Vince Cable, and Chancellor, George Osborne, have issued 'Financing a Private Sector Recovery' to highlight the problems businesses face when accessing finance.

The paper sets out the range of finance options for different sized businesses, explores where the market is failing to provide and analyses the role for government intervention. It launches an intensive discussion on how business and the government can work together to produce a diverse, competitive and sustainable financial environment.

Every major finance option is addressed, including more use of equity and encouraging venture capital and ‘business angels’ to invest in a wider range of businesses, and a responsible return to securitisation. The paper sets out options for the industry, such as an insolvency moratorium on companies restructuring their debt, increasing transparency in bank loan applications and fostering competition between banks and finance institutions.

The paper also addresses the success of existing government schemes, such as the Enterprise Finance Guarantee, and whether they should be improved or extended.

Business Secretary Vince Cable commented on the launch:

“If we don’t anticipate and tackle finance barriers now we could face a big problem in the future. Left unchallenged, a lack of accessible finance for businesses could prevent the recovery accelerating.

“I’ve heard the problems businesses are facing in getting bank loans up and down the country. They need innovative ways to access finance from other sources to grow our firms and economy. That’s why this green paper is so important, as we look to help viable firms get the money they need.”

Further details on the paper and consultation are available on the BIS website (opens in new window).

Source: BIS News Distribution Service, 27/07/10

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