A survey carried out by Crunch Accounting has found that only a small minority of UK small companies think that the Coalition’s proposed ‘Business Bank’ is a good idea.
What is the British Business Bank?
In September 2012, Vince Cable, the Business Secretary, announced the creation of a new British Business Bank, which should be able to support up to £10bn in new lending when fully operational, if it manages to attract sufficient private sector funding.
The proposed bank’s purpose, according to its planners, is to “encourage the development of private sector solutions and enable the market to work properly, not compete with it.”
The Business Bank will operate at arms-length from the Government, and will be “professionally run and commercially focused” in lending money to British firms though banks and other financial institutions.
Cable made the announcement at last year’s Lib Deb conference, but given the impressive aims of the proposed bank, very little in terms of detail has been released to the media since last Autumn.
Small companies unimpressed
Worryingly for the Government, new research suggests that the announcement has not been well received by the potential recipients of loans from the new organisation.
A survey, carried out in December by One Poll on behalf of Crunch Accounting, found that a mere 13% of respondents thought that the bank is a good idea for the SME sector. Furthermore, just over a quarter felt that there would be a conflict of interest if both the Government and private sector backers are co-running a state-backed institution. A similar percentage had not been provided with sufficient information to be fully versed on the proposal.
Commenting on the survey’s findings, the accountancy firm’s MD, Darren Fell, said that the Business Secretary’s idea is already “failing its target market.”
“With over 80% of SMEs either rejecting the idea or saying they are too ill informed to make an opinion, it seems that Cable’s proposal is little more than lip service. Simply, if half the funds are from private investors then it is shareholder controlled, and ultimately for shareholders’ profit and benefit.”