I was reading a report (Finance for Growth - "Challenging the myths about funding for small businesses...") from think tank Demos (to download Click here) today that said that the SME lending crisis was a myth. Basically they found that 40% of UK SMEs were permanent ‘non borrowers’. Only 40% had applied for credit in the last year and, of these, just 1 in 25 were refused. Let’s face it, there are some cases where it is only right and proper that credit should be refused.
Demos makes the point that “The argument is not only wrong, but it is also sucking up valuable political energy – not to mention funds”.
I have to admit that the banks would be about the last place I would turn to. I can’t believe that TechMarketView LLP is so unusual. It got funded by a serial entrepreneur-cum-angel investor (ie me). TMV’s main objective was to become cash-flow positive as soon as possible – which we have done. We therefore have all the cash resources we need to grow (BTW - c50% revenue growth last FY ) within TMV.
If we needed additional funds for even more rapid expansion, we would first turn to our own shareholders and our staff, then ‘friends & family’ and then to the VCs/VCTs that we know. If all that failed we clearly might have got the message that we were uninvestable and wouldn’t waste any further time with our bank.
There is a lot of money out there looking for a good home. I don’t believe there should be a single business in the UK that is investable that shouldn’t be able to get that investment without recourse to the banks. But there are clearly a lot of companies that are uninvestable – ie I wouldn’t touch them with a barge pole. But that is surely a different issue!
Would appreciate your views?