An expert in the field of small business finance has called for the Government to stop bashing the banks and look for another solution to help firms grow.
Dr Steve Walker, chief executive of ART, which provides loans funded by its own resources as well as by Advantage West Midlands and Birmingham City Council, said it was time the debate about lending moved on.
Speaking at ART’s annual general meeting, Dr Walker said: “It’s time for everyone – the banks, the Government and its advisers – to acknowledge that the higher risk small and micro businesses that make up over 99 per cent of the total businesses in the UK cannot be serviced by the banks at a realistic interest rate.
“If they came clean on that, we could then move the debate about bank lending forward and turn attention to finding an alternative solution.”
Dr Walker, a banker himself for 29 years before helping to set up ART in 1997, said that if a tiny fraction of the £2 billion that could be raised from the banks in taxes were to be given to ART and organisations like it, they would be able to leverage additional money and meet demand for loan finance to viable small and micro businesses.
ART is one of many community development finance institutions (CDFIs) throughout the country that have been targeting their lending for many years only to those businesses the banks have been unable to support either at all, or any further.
CDFIs are independent, not-for-profit, organisations designed to support enterprise and stimulate their local area economies.
Across the UK they lent a total of £35 million last year to businesses the banks considered too high risk.