With more than two-fifths of businesses feeling positive about the economy – 20% more than this time last year – now is the time to build on this momentum, says Chris Elias – Barclays relationship director, corporate banking in Swindon.
Speaking with just over a week to the Budget, Chris, pictured, sees it as an opportunity to think positively about how to create the right conditions for long-term, sustainable success for the UK.
This success, he says, will be achieved by focusing on some key areas.
Fostering entrepreneurialism: The Government should consider ways of creating a world-class ecosystem for entrepreneurialism. Fundamentally, we believe that high growth potential start-ups require significantly enhanced access to non-bank risk finance. The UK business finance market relies on 80% of its finance via traditional lending, while in the US, this stands at only 20% with 80% derived from non-bank sources.
Focus on non-bank risk finance to address the growth finance funding gap – a vibrant bank lending environment is fundamental to the success of UK businesses, but it is clear that the lack of effective non-bank markets suitable for providing long term risk finance is a significant barrier to growth.
We would encourage the Government, through the business bank, to consult on how to support the development of a diverse market for risk finance, and consider ways of enhancing the geographical coverage of these funding channels, while sensible regulation would encourage participation through the provision of confidence without excessive regulatory burden.
Exports: The UK has a long history as a trading nation. With the emergence of new economic powers in the East, as well as in Africa and Latin America, a new global race to supply the goods and services needed in those regions has surfaced. Barclays is working hard to support the government’s export strategy through measures to give SMEs the tools and confidence to look abroad. With enhanced support to medium-sized companies, this will see a fundamental shift in the UK’s competitiveness and subsequent ability to increase exports.
Enhance awareness of export support programmes – many UK companies, especially SMEs, are still unaware of the different export support schemes provided by the government. We encourage the government to begin a renewed programme of promotion to potential exporters of all sizes to increase explicit awareness and the benefit of UKTI and UKEF to UK business.
Greater information sharing between UKTI and large businesses – the Autumn Statement’s commitments to increase UKTI’s presence in India and China, and the proposed British business Centres in six key emerging markets are encouraging for SME exporters. But large businesses often have deep knowledge of target export markets, in the common target regions and less recognised areas which might offer high potential markets for smaller exporters. We ask the government to build on current success to deliver a more effective transfer of information and partnership between SMEs, larger businesses and the government to ensure our smaller businesses are able to respond quickly and effectively to potential trading opportunities.
Stronger ties between Government, banks and large companies: London boasts world-class financial expertise. Barclays fully acknowledges that we as a bank have a fundamental role to play not just in financing overseas expansion but also in instilling our expert global knowledge and networks. This is something that our seminars that connect experienced exporters and businesses, for which exporting is a completely new concept, are a good example. We believe stronger collaboration between the financial industry and the government could truly enhance the ability of established exporters to transmit their knowledge to potential new exporters.