FSB calls for new finance options

In a new report Alt+ Finance: small firms and access to finance, the FSB has urged the Government to promote alternative forms of finance, such as peer-to-peer lending models, and to learn the lessons from other countries where routes to finance are varied, local, longer-term and reliable.  

The FSB is calling for:

■ The Government to assess the possibility of opening up its own investor account for peer-to-peer lending, where a business loan is funded by a pool of investors.

■ Community development finance institutions, made up of firms that lend money to small businesses that struggle to get funding from high-street banks, to be brought into the mainstream and for the Government to look at the success of the US in boosting this model through Government funding.

■ The creation of a debt bond market for small businesses that need greater funding (upwards of £250,000).
FSB national chairman John Walker said: “We need to accept that in its current form, our banking structure might never fully cater to the needs of the UK’s business community. We need to build alternative routes that connect savers and investors with viable small businesses eager to grow, and thereby introduce innovation and competition to the sector.

“We challenge the Government to look for short term wins, as well as thinking about the longer term and the kind of financial infrastructure we need to underpin our economy and support small firms to grow.”

For the full report, visit www.fsb.org.uk