ART: A Question of Lending
FIVE years after the credit crunch, there remains much criticism of the banks by politicians and the media for not lending enough to businesses. So what is happening?
The answer is that this is not a phenomenon caused by the credit crunch from which we can expect the economy one day soon to ‘recover’.
As someone who has worked in business finance practice and policy for over 30 years, I can testify that the banks were withdrawing from providing smaller loans to businesses long before the credit crunch. The trend may have been accelerated, but it was there – and being addressed – well before 2008. Since then, numerous new providers and initiatives, some with public sector support, have come on stream in an effort to ensure that viable businesses can access the finance they need.
The problem now seems to me to be not so much a lack of appropriate business finance, but a lack of awareness of the options available. Two national websites, which are supported by professionals and business support bodies, have been set up to address this: www.betterbusinessfinance.co.uk and www.businessfinanceforyou.co.uk. Both are worth taking a look at.
They contain a wealth of information, the former detailing the types of finance on offer and the latter also including where they are located. In addition, many of the LEPs (Local Enterprise Partnerships) are now providing their own sites with information relating to their locations. The Greater Birmingham and Solihull LEP, for example, has an access to finance portal at www.gbslepbusinesssupport.com.
My own organisation, ART (Aston Reinvestment Trust), is a CDFI (Community Development Finance Institution) – one of many around the UK – set up in 1997 specifically to offer loans to small businesses unable to access any or all of the finance they need from a bank. Our remit is to support enterprise and jobs in and around the Greater Birmingham area. Most CDFIs cover geographically-specific areas, although the type and size of loan they offer can differ. More information about CDFIs can be found at the trade association website www.cdfa.org.uk.
ART and other CDFIs often lend alongside the banks and other financial providers. In fact, it is far more usual nowadays for a blend of different sources of finance to be the planned solution to fulfil the needs of a business. We might be able to find a bank to assist, especially as the economic situation improves. Our knowledge of the market is extensive and current, and we signpost to other providers and specialist finance brokers where appropriate. We also have a large contact base and information about sources of finance on our website www.reinvest.co.uk.
CDFIs are known as ‘additional’ lenders, supported by public sector as well as private sector finance. There are now also a number of ‘alternatives’ to bank finance available, including peer group lenders, who do not need to see a decline from a bank.
My advice is to look beyond the top three or four options your search engine offers and delve deeper – I promise it will repay your investment of time.
To find out more about loans from ART call 0121 359 2444 or see www.reinvest.co.uk.
