Investment for SME owners

A new TUC report deals with the lack of investment in UK industry. Now it’s not often that I see eye to eye with the TUC General Secretary Brendan Barber, but in introducing a TUC report on the banking sector he said: “Much of the media and political debate around banking has been on top bonuses and preventing another financial crash.
“But while these are both important issues, people are more concerned about jobs, better wages and healthier businesses – and banks have a vital role to play in creating all this.
“Decades of under investment, compounded by banks’ poor track record of lending outside of real estate and finance, have left the UK economy dangerously lopsided. Our economy is far too focused on finance and banking, and in the South East.
“Greater lending to SMEs and support for green investment is vital to our future economic prospects but our current banking system is woefully ill-equipped to lend.
“Bold new ideas are needed to reform the banking sector so that it returns to its proper place as the engine of wider economy growth, and not as the cause of an economic depression.”
All valid points, but I would add two more comments. First is that many SMEs are woefully bad at preparing their companies for investment and putting together coherent business plans that will attract investment.. Put this alongside the fact that all banks have tightened their lending criteria and it’s hardly surprising that most banks are missing their lending target. I can help with that
Secondly, business owners should be aware of alternative sources of funding. As a consequence of banks tightening their lending we have seen the emergence of new and inventive methods of funding for business (and for the domestic market). If your bank won’t play ball it’s worth taking advice about these alternative sources.