I went on Sky News to talk about alternative finance:
Here’s what was said:
JR: Politicians have made much of [this week’s lending figures], they have stated it is all the banks fault if they’d only lend the economy would recover. But in fairness to the banks they appear to be pretty much performing?
AS: I think we have to be careful with the statistics. If you take the whole lend amount they are only £1 billion behind. But the break out figures for lending to SMEs show lending has fallen quarter on quarter by about 8.3 per cent. Now that is coming in the third quarter which tends to be a busier quarter compared to the summer months. So what you’re seeing is that small businesses are finding it harder to get finance. At MarketInvoice we see a lot of small businesses – I’m talking about companies turning over between zero and 10 million pounds – we are seeing them every day and they are saying it is difficult to get finance and even when you can get finance it is more expensive and it is more onerous.
JR: Small businesses say we’d like more finance but 3-4 years ago banks were jet hosing businesses in cash and that was part of the problem, they lent money too easily.
AS: I completely agree I think the whole financing landscape has to change and if you look at the Federation of Small Businesses they came out with a statement saying there is too much concentration. The top 5 banks control 85% of the small business banking market. MarketInvoice is an example of innovation; we are connecting small businesses to asset managers, hedge funds, people who have never been able to channel money into the SME sector.
We are innovating, we are making the financing landscape more competitive and although we are small right now we have a really important role to play in the small business financial landscape.
The government should not just flood the market with subsidised loans and should not have a state owned bank they should be embracing private sector innovation, which is currently happening.
JR: Do you expect growth in the SME sector in the next year?
AS: I think it’s going to be a tough 12 months going forward for SMEs I think we are growing very quickly because a lot of SMEs are feeling the pain.
Co-Founder of MarketFinance