Financial nurturing 'will grow businesses'
A 'structural failure' in the financing of small businesses in the UK is impeding the development of world-class technology firms, according to the British Chambers of Commerce.
The government needs to address this failure if it wants to turn the UK into a "national incubator" for the "wealth creators of tomorrow", the director general of the BCC, John Longworth, has warned.
"There is a long-term, structural failure in business finance in the UK, made worse by the banking crisis, and this hampers our ability to nurture a British Samsung or Google," Mr Longworth argued in the BCC's New Year message.
He said because promising British businesses cannot get the finance they need to grow, they can be "hoovered up" by private equity firms and competitors.
Mr Longworth added that while foreign investment can be beneficial, "this is not automatically the case". "We must find ways to become a national incubator for those who want to be medium-sized enterprises, so that when they reach this stage in their growth cycle, they have the opportunity to become the UK's wealth creators of tomorrow," he said.
Net bank lending to small and medium-sized firms continued to decline in 2013, despite the Funding for Lending Scheme to increase the flow of loans.
Their plight was also spotlighted last year by findings from Lawrence Tomlinson, the Department for Business entrepreneur-in-residence, that the Royal Bank of Scotland deliberately pushed many small firms into administration to asset strip them.