Small firms should make the most of alternative options for commercial finance in Scotland and the rest of the UK, according to the Confederation of British Industry (CBI).
In a recent report put out by the business group, it is suggested that spending could be increased by billions, by looking at facilities such as invoice discounting. It would also increase jobs and help return the economy to strength, the report goes on to conclude.
Whilst there is much emphasis on larger companies contributing more to the country, it is the smaller firms which are the real key to growth. By using more flexible options to fund daily operations, the CBI sees a far brighter future.
The report said:
“A thriving SME sector is critical for maximising the UK’s growth potential and access to finance is fundamental to enabling businesses to realise their growth ambitions.
“These firms could be worth an additional £20bn to the economy by 2020, but only if they can access the finance they need to grow.”
There is also a move from Westminster to push smaller firms to use all the funding options open to them. Vince Cable, the business secretary, agreed with the CBI and highlighting the desire of the government that more businesses will move towards alternative funding, he said:
“The government wants to see a shift in the market structure towards non-bank lending.”
Cable highlighted the coalition’s Funding for Lending Scheme as a move to help this, which now includes non-bank lenders.