Small businesses might be forgiven for thinking that all their Christmases have come at once! First, the Chancellor announces his plans to launch credit easing. Second, and just days later, the Bank of England announces more quantitative easing. Finally, this week, RBS announces its Community Business Loan. Each of them has one thing in common, there will be strict conditions attached for businesses to qualify.
At the Tory conference, George Osborne promised to 'get credit flowing and encourage investment.' His plans for credit easing were certainly crowd pleasing. If the plans were long on applause they were equally short on detail. His autumn statement in November is expected to elaborate. But let's not be churlish, if the banks are reluctant to provide business finance, why not get it from the Government?
But wait a minute! Sir Mervyn King then tells us that the Bank of England is releasing another £75bn saying 'the right thing at present is to create some more money to inject into the economy'. He clearly doesn't share the Chancellor's pessimism about commercial bank lending intentions, and let's hope he's right!
This week, RBS launches a £5m Community Business Loan aiming to provide loans to those who 'do not qualify for mainstream banking lending.' Their plans are more clearly defined with social enterprises, charities and community interest groups being targeted.
I welcome all of this because SMEs and new start-ups are vital to the economic growth that the Government, the Bank of England and RBS all want to see. So, what's bugging me? It's the Government's plan to exempt micro-businesses from filing accounts at Companies House. Why can't they see that banks won't lend and suppliers won't extend credit to business without access to audited accounts? Surely more financial transparency would be better?