With so much debate about growth vs austerity, we might just be forgetting one tiny thing …
Where will the growth (really we mean jobs) come from? Not the public sector, probably not the corporate sector but almost certainly from small to medium-sized enterprises (SMEs). We know that entrepreneurs do three things: i) innovate, ii) create jobs and iii) redistribute wealth. So, what is their appetite for growth and what do the need?
Even if a small business identifies an opportunity, has the right people onboard and decides they want to grow, they will probably need to access funding. If they are fortunate, and unusual, they may have reserves but more likely they will need access to external funding.
The obvious place to go is the bank. But the lending picture is unclear. Project Merlin isn’t delivering. Perhaps not surprsingly, with 40% of rejected applications were overturned by the new appeals process.
But the banks aren’t the only source of funding –
- The Angels: Business angels
- The Plastic: Credit cards
- The Crowd: Online lending marketplaces
- The Government: National Loan Guarantee Scheme
- The Government Again: Start-up Scheme (put only if you are young!)
You pays [borrows] your money and you takes your chance …
Prof Nigel Lockett FRSA
Professor of Enterprise at Leeds University Business School