Vince Cable's Variety Show for Business
The Government has announced £300m of funding for businesses to pave the way for the long-awaited Business Bank. Will this be the start of greater stability for the UK's businesses or will the real benefit of the Bank only be revealed in the long term?
The big high street banks' recent claims of reduced loan demand from the UK's businesses (particularly small and medium enterprises) clearly shows most businesses have given up on traditional bank loans to solve their problems. Now it seems they're not alone as the Government is looking elsewhere for a funding solution. Perhaps after schemes such as Funding for Lending and Project Merlin showed such a lack of success the powers that be have given up on the penny-pinching giants and their latest plan, in the form of the Business Bank, is aimed squarely at the alternative options.
Business Secretary Vince Cable announced his intentions to create a state-backed business bank late last year but now it seems the bank won't be ready to run until 2014. However, no doubt in response to impatient noises from the business community, Cable has welcomed applications for portions of £300m of the planned £1bn total starting now.
Cable said “Today's £300 million boost shows we are serious about increasing competition and diversity in the business lending market. Establishing a lasting business bank institution is a long-term project, but getting this money reaching SMEs as soon as possible is the first step."
This money won't be available through the usual big UK banks however but will only be granted alongside an, at least equally matched, private sector investment. In this respect the Government is viewing the Business Bank as an extension of the Business Finance Partnership that provided £110m of funding to businesses in 2012. This means the money will be given to existing lenders rather than directly to the businesses that need funding so those impatient for vital funding will have to wait a little longer.
However, this delay in the supply chain may not be a disadvantage in the long run. For some time now concerns have been raised over UK businesses' reliance on the big high street banks for funding when it would be far healthier to have a wider and more diverse platform of financial support available. This reliance has, of course, been created through a lack of alternatives but now that the traditional banks are not lending enough to businesses the disadvantage of such a narrow range of choices has hit home. For this reason the Business Bank will, hopefully, be serving a double purpose by supporting businesses and creating stronger alternatives to traditional bank loans.
Reports say the Bank will be taking applications for the £300m from a variety of existing lenders such as debt funds, asset backed lenders, peer-to-peer financiers, challenger banks and supply chain finance among others.(See People4business's look at the alternative solutions)
Whether or not funding in partnership with the Business Bank will make existing lenders any less cautious with their loans remains to be seen, but, even if the Bank doesn't create a more stable future for UK businesses at least it will have potentially created more options for future companies. It is expected the first will take place in Autumn this year so watch this space.
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The UK's 'big five' banks have long been accused of not lending enough to the UK's small and medium enterprises (SMEs) but it seems now they might have an excuse. A new report has shown that, since the start of 2013, loan applications have dropped significantly. So what's going on behind the statistics?
The banks have made similar claims before (see the Project Merlin fiasco) but this time they have back up. The Federation of Small Business's “Voice of Small Business Index” shows there has indeed been a 3 percent drop in loan applications from SMEs compared to this time last year. However, the crucial question is what's behind this drop in demand? One company has an answer – but the banks won't like it.
Investments in technological companies in 2012 reached over the £1 billion mark – the highest since 2001. Is this where the future of the UK economy lies?
The figures aren't just indicating huge investments in this area but growth levels to match. The majority of the press attention has fallen recently on Old Street, Shoreditch – now affectionately (and optimistically?) dubbed silicon roundabout, or tech city and perhaps not without reason. The roundabout started with just 15 technology and digital companies which grew to 200 in just one year. Now the total is over 1,300 businesses operating in East London.
Against the backdrop of Moody's downgrade of the UK's AAA status and the fresh revelation that unemployment rose to 2.5 million at the end of 2012, the Chancellor had a politician-in-a-weak-economy's chance of making anyone happy in his Budget speech on the 20th but, against all the odds, did he manage it?
So the day of the speech didn't start too well; the papers were full of tales of unemployment, George Osborne became Twitter-famous as the #downgradedchancellor, and everyone knew he'd have to start by cutting his growth estimates dramatically but, judging by the 1p reduction in beer duty, Mr Osborne was clearly out to make some friends. As expected, it was all still about austerity measures and there were still the usual empty-sounding promises – the 'Business Bank' for example, was talked of again with no firm details (it strikes People4business that if the Chancellor spent less money setting up brand new publicity-friendly funding schemes he might have more to put into the ones that already exist).
As of April the 6th 2013 the HMRC will require employers to switch to their Real Time Information (RTI) reporting system for PAYE. However, just one month from the launch date and 81 percent of companies admit to knowing either nothing or very little of the change despite it affecting all employers. So, what is RTI and how could it affect you?
The basic idea is that every time an employer pays an employee they report it to HMRC in real time rather than waiting until the end of the year. The advantage of the system is that, if properly followed, HMRC will have accurate information of every employee and employer in the UK and, consequently, the number of forms for employers to submit in general will be significantly reduced as P35s and P14s will no longer be necessary.
Whether you spend the year preparing payments or remain in denial until the night before, the chances are that paying your tax each year takes its toll on your bank account – not to mention the stress of finding, filling in and sending off the right information in time. But what if someone could offer you an easier way?
A recent YouGov poll found 21 percent of micro-business owners were made anxious each year by the tax process and 5 percent even admitted to being terrified. The good news is that just over a third of micro-business owners said they felt confident going through the process but even so, the majority of respondents also explained they end up paying more than just their tax when accountancy and advice fees are added.
Complaints of a shortfall in the skills and knowledge of school leavers have arisen again among business owners and the finger of blame is pointing right at careers advice in schools. Is poor advice really to blame, or is there more to the problem?
The Chartered Institute of Personnel and Development (CIPD) conducted a survey of employers to discover how equipped school-leavers are for the world of work and found that the majority have found young candidates lack the necessary knowledge or skills for employment.
As the new year begins, many people dream of the possibilities over the next twelve months. This is the time to reconsider career paths, make the leap to self-employment or really work on that great business idea, but do you have the personality it takes to make a success of a business?
Now, there is no single type of person who can be successful, but the fact is that some characteristics are more likely to lead to success than others. Exactly which traits lead the way in business a recent survey has set out to determine. Television would have us believe the only really successful business people are impulsive, charming, risk-takers with no fear. But are these really the perfect traits for leading a business to dizzy heights?
George Osborne has admitted the UK won't have cut the deficit by the required amount before his deadline and, consequently, rating agency Standard & Poor have put the UK's triple A rating on a negative outlook with threats of a full on downgrade. This means the Chancellor is probably on a bit of a downer for the end of 2012 but why does evidence suggest the rest of us are looking forward to a better 2013?
Even those living under rocks will be aware by now of the difficulties the UK (and the rest of the world) has been battling and this year has certainly been no exception. Reports of high unemployment, mass underemployment and a series of big-brand closures on the high street have dominated the headlines so far, however, through all this negativity a ray of sunshine has prevailed.
Could the appeal of self-employment and 'being your own boss' be becoming a possibility within the relative safety of traditional employment? That's the question posed by The Wall Street Journal (WSJ) as it profiles three established American Companies that are challenging the expectations of employee management.
Pioneering a way of working that comes somewhere between traditional employment and self-employment, what exactly are these companies doing and could it ever replace traditional management?