Something many businesses often find problematic is being able to secure a loan from their banks, no matter how small or risk-free it may be. This scenario is being played out across Wales, and it seems that smaller firms are the ones bearing the brunt of banks’ reluctance to give them money to invest in their futures.
The Welsh Assembly and the Westminster Government are to launch a review into how difficult small businesses in the principality find accessing finance from the banking sector. As part of the review, they would also investigate alternative sources of finance available for SMEs in the region.
Edwina Hart, the Business Minister claimed that the government would do all it could to ensure that small firms in Wales had all the help they could get in order to access the finance needed to help fund investments, expansion or even just to keep afloat. The review will be chaired by former Conservative assembly candidate and University of Wales business expert Prof Dylan Jones-Evans.
This review comes after the much-heralded Funding for Lending Scheme launched last year by the Bank of England was designed to help make it easier for SMEs to take out loans. However, Mrs Hart as well as some consumer groups argued that lending was still a problem for small businesses in Wales.
“Access to finance from external sources is essential for growth of firms and the Welsh economy. If banks continue with their reluctance to lend, then we might not see the economy rebound”, said Mrs Hart.
While the Funding for Lending Scheme is still running, the fact is that small firms in Wales are continuing to find help from high street banks hard to come by. Until this issue is resolved, SMEs may have to look at other ways of raising much-needed funds.
