Industry Insights

Economic recovery? Finance for business is key!

Is the UK economy finally recovering?

Recent reports, if they are to believed, indicate that our fragile economic state is showing faint signs of recovery – one might say that, metaphorically, the long, harsh winter seems to have passed and the bravest of plants are sending out their green shoots – we just need to wait to see whether the inclement climate has truly passed or if a sudden cold snap may sweep in.

Finance for business is still a barrier to growth

The adversity of the business climate continues, however, to be exacerbated by the difficulty that SMEs, in particular, have in accessing funding in order to expand. 

We have, in previous blogs, highlighted the importance of the UK’s infrastructure of SMEs for the employment and growth opportunities that they create. 

These innovative and often ‘disruptively constructive’ firms are still finding it increasingly difficult to access and secure funding opportunities.  In fact, a recent report from the Big Innovation Centre drew attention to the fact that in the period 2010/12 over one third of SMEs seeking finance failed to achieve their objective. 

The report, which collated data collected from over 11,000 UK SMEs, also noted that one in four failed to secure any funding at all.

We ignore the plight of these businesses to our own detriment.  Innovation, creativity, employment opportunities and infrastructure underpinning ought all to be championed, the small business sector is pivotal to the greater success of our economy as a whole and yet the small business sector repeatedly fails to make inroads into securing finances, finding it much more difficult than their larger peers.

We can’t afford to wait for the lethargy of policymakers and, consequently, the traditional funders, to lift.  This is yet another reason why the time is ripe for crowdfunding and the benefits that it can bring.

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Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.