We are finding finance to help build your business
Ensuring local firms can access credit is the key to a vibrant Northern Ireland economy, write Vince Cable and Theresa Villiers
After such a successful G8 summit, the task facing us now is to capitalise on the global exposure Northern Ireland has received to boost investment and growth. The package of measures we agreed with the Executive before the summit sets out a substantial joint programme of work to help grow the economy.
A problem we hear time and time again is that the banks are not lending, or that businesses are unable to access the finance needed to grow.
While this is a common theme across the UK, there is no doubt that the financial crisis has had a marked impact on Northern Ireland.
Banks and businesses have found themselves highly exposed to the burst property bubble, meaning many businesses are unable to take on, or service, additional debt and banks can be cautious about extending new lines of credit to them.
Nevertheless, it is important to challenge some myths around bank lending to small businesses in Northern Ireland.
Many businesses report that they do not seek finance for fear of being turned down and the banks report historically low levels of demand.
But businesses are no more likely to be turned down in Northern Ireland than elsewhere in the UK. According to the latest surveys, Northern Ireland businesses are up to 10% more likely to be granted an overdraft facility, or an alternative form of finance, than businesses in Great Britain.
But we recognise that access to finance continues to be a significant concern for businesses and that the Government and Executive need to work together to address this.
That is why proposals from the Department for Business, Innovation and Skills (BIS) to help access to finance formed an important part of the major package of support, Building A Prosperous And United Community, that the Government and Executive announced earlier this month.
Today we are pleased to confirm the extension of our hugely successful Start Up Loans scheme to Northern Ireland. This will give young people in Northern Ireland wanting to start their own business access to a £117m fund.
Where there are gaps in the market, the UK government is stepping in to help bridge them. The Funding for Lending scheme has been extended for a year and tailored to increase support for small businesses.
Ulster Bank has already used the scheme to agree more than £70m in new lending to businesses. We will continue to press for all banks in Northern Ireland to take part.
The Enterprise Finance Guarantee scheme, which supports lending to viable business lacking adequate security for a commercial loan, has facilitated loans to 225 businesses in Northern Ireland, with a value of £31m. We will be working with the Executive and the banks on how we can increase take-up of the scheme in Northern Ireland.
In addition, BIS is making rapid progress in establishing the Business Bank, with £1bn of support that will be operational from autumn 2014. These initiatives complement the Executive's £100m Access to Finance strategy.
We want to see greater competition in the banking sector and we are supporting the establishment of alternatives to the banks. The Business Finance Partnership, specifically aimed at non-bank lenders, has made finance available to businesses via partners in Northern Ireland.
We are aware that the Government's wider work on banking across the UK has important implications in Northern Ireland. As part of the Treasury's examination of the case for an RBS 'bad bank', the Government will consider the wider impact on the UK economy, of which Ulster Bank's role in Northern Ireland is a fundamental part.
With its highly-skilled workforce, excellent communications, reputation as an attractive destination for foreign investment and the momentum of a successful G8 behind it, Northern Ireland has the foundations to rebalance its economy.
Making sure businesses have access to the credit they need is vital to create the vibrant and dynamic economy that we all want to see.