Lord Sugar sets record straight on ‘moaning SMEs’

ALAN Sugar has hit back at his critics in a hard-hitting new article for a small business support and lobby group.

The Government enterprise tsar recently faced accusations that he was out-of-touch with SMEs after he made some controversial remarks on bank lending.

Lord Sugar was reported as saying some small business owners who complained about being refused loans were ‘moaners’ who were living in ‘Disneyland’.

However, in editorial written exclusively for the Forum of Private Business (FPB)’s quarterly Business Insight magazine Lord Sugar insists he is “passionately committed” to helping small firms.

He adds that he was misquoted when he spoke about bank lending and small firms at the business event in Manchester last month.

But he reiterates his belief that only a small proportion of complaints he has received on the issue have been “genuine horror stories”.

“The majority were cases where it wouldn’t have been right for the bank to lend in the first instance, owing to things like having a poor business case, a lack of security or simply unrealistic expectations,” he writes.

“The Government has always made it clear that it only expects banks to lend to viable businesses. Inappropriate lending in a large part precipitated the global financial crisis.”

He continues: “When I started my business career there was no question of going to a bank to get money to set up a business.

“The reality then, and now going forward, is that the banks want to do business, but they will expect sound business cases to be put before them. It would be both unrealistic and undesirable to expect them to lend as freely as they did over the last 10 years.”

Lord Sugar goes on to say that entrepreneurs can’t expect to receive bank financing simply for having “a good idea” and should make sure they have thorough business plans ready to present to decision-makers.

“In my business career, when I found a bank wouldn’t lend to me, I went back to my proposals, took account of what I was being told and reworked my plans to get the finance. The banks proved a good barometer of the advisability of my plans.”

Commenting on Lord Sugar’s article, FPB chief executive Phil Orford said: “When Lord Sugar’s comments hit the headlines last month, I was one of the first people to take issue with them

“I still can’t say I support his views on the credit conditions currently faced by small firms – I think the problem is much more widespread than he realises. But at least he cares about his perception among small firms and has made the effort to address their concerns through our magazine.”