Parliamentary representatives to examine the hurdles small-scale enterprises encounter in securing funding
The Treasury Committee, a group of MPs from various political parties, has initiated an inquiry to investigate the access of small businesses to capital in the UK. This investigation aims to identify barriers and propose solutions tailored to the needs of small businesses, particularly those from underrepresented demographic groups such as women, people from ethnic minorities, and certain social backgrounds.
The inquiry will examine a range of issues, including the impact of Covid schemes on businesses and the usefulness of the British Business Bank. It will also look into the challenges small businesses face when seeking finance and the role of financial innovation in this process. The role of the Bank of England's term funding scheme, which incentivized high street banks to lend to small businesses, will also be under scrutiny.
Khalid Talukder, co-founder of DKK Partners, has warned of the severe economic consequences if the chronic underfunding of Small and Medium-sized Enterprises (SMEs) is not addressed. He suggests encouraging international trade and giving SMEs access to the latest payments technology as key solutions to support SME growth. Steven Mooney, CEO of FundMyPitch, shares this sentiment and advocates for a parliamentary inquiry into the lack of access to funding for UK entrepreneurs, calling for more support for SMEs.
Laimonas Noreika, CEO and founder of HeavyFinance, highlights the potential risk for companies to deprioritize tackling emissions and developing environmentally friendly business models without adequate funding. He urges MPs to explore the role funding plays in improving the wider economy and the environment as part of this inquiry.
The committee will also examine credit reference agencies and the support from the government available for firms. There is concern over access to finance for businesses across the political divide, with Labour pledging a shake-up of financial support and Jeremy Hunt announcing the government's "Edinburgh reforms" to encourage more lending in the UK economy.
The tech experts involved in the inquiry have expressed concern about the challenges SMEs face in accessing credible financial support in the UK compared to other parts of the world. They imply that the lack of access to funding is a significant barrier for SMEs to hire talent, develop their product offerings, and compete in the global arena. Josh Boer, head of sales at VeUP, emphasizes the importance of giving SMEs access to funding to drive growth and stimulate the economy.
In conclusion, the parliamentary inquiry into the access of small businesses to capital is a significant step towards addressing the chronic underfunding of SMEs and ensuring they have the necessary financial support to grow, innovate, and contribute to the UK economy. The findings and recommendations from this inquiry are expected to provide valuable insights and solutions to improve the financial landscape for SMEs in the UK.
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