April 2018
By Adam Tyler, executive chairman at FIBA
Following the Access to Finance event that I chaired in the House of Lords at the end of March, we are in the process of completing the paper - due to be delivered to parliament later this year - on the state of SME funding in the UK, and how it can be improved. The breadth of this report covers all aspects of specialist finance, including short-term and development lending.
For business leaders who have a basic knowledge of how they could raise finance, a first point of contact for almost everything - as well as a good reference point - has been the internet. We could question if too much choice can lead to inertia, and whether a decline by a traditional source of property finance leads to a loss of interest in pursuing an alternative. As an organisation, FIBA can serve as an online, authoritative, go-to information source with the Partners we already have involved, and with our Members’ support. That would provide borrowers with the ability to make a more informed decision, and better connect the lender community with the end users.
The overriding reaction to the Access to Finance summit mentioned above, which was attended by a representative of the Treasury Select Committee, was a call for education. This is the long-standing need and an established campaign to raise awareness and confidence among the UK SME community to expand their horizons and look to other business lending sources that are available.
It is difficult to apply the full marketing support that is required, on a national scale, as an individual intermediary or a funder. At this moment in time, local promotion through the traditional sources, which has worked for many years, is the tried and trusted method. This is measured by the success of the number of new lenders that have come to the market and built a book over the last five years, supported by the broker channel.
On another note, it is worth pointing out that FIBA has been considering the latest consultation from the FCA on how to improve access to the Financial Ombudsman Service (FOS) for small business owners. Among the proposals is a move to broaden the number of firms that would be eligible to make a complaint to those businesses which turn over less than £6.5m and have fewer than 50 employees. At present, only the smallest firms can complain to the ombudsman. (However, owners of dissolved businesses or those subject to insolvency proceedings fall outside the scope of the proposals.)
The response closed on 18th April and the proposal is to widen the scope of the FOS - subject to the results of this consultation - by 18th December 2018.