Taskforce to boost finance options for businesses
Latest news - 10th February: The industry-led taskforce, chaired by Tim Breedon, CEO of Legal and General, held their third meeting.
Taskforce members discussed the contributions gathered from the 100+ respondents to the review's call for evidence and from the 7 regional and technical workshops the Taskforce has held with businesses and market participants. This covered information on, and experiences of, the barriers to non-bank lending, and a range of ideas and insights into how they might be tackled.
What is the Taskforce?
As part of the Government's work on credit easing, the Secretary of State for Business, Innovation and Skills has set up a non-bank lending taskforce. It will be chaired by Tim Breedon, Chief Executive of Legal & General Group plc. The taskforce has been commissioned to examine structural and behavioural barriers to the development of alternative debt markets in the UK, building on recent work on this subject. It will make evidence-based recommendations to Government ahead of the 2012 Budget on practical measures to facilitate the development of these markets.
UK businesses have been heavily reliant on banks to raise finance. The majority of smaller and mid-sized businesses rely solely on bank loans to raise finance. Only around ten per cent of these businesses seek asset-based finance and fewer than five per cent choose bond or mezzanine finance.
The Taskforce will work with businesses, lenders, investors and providers of alternative finance to examine structural and behavioural barriers to raising non-bank finance. It will set out what steps are needed to ensure businesses can access a wider range of alternative finance sources.
Improving access to non-bank debt: industry taskforce terms of reference (PDF, 125 Kb)
The taskforce is inviting views from business and other industry members on how Government can support a stronger non-bank lending landscape in the UK.
Submissions to the call for evidence should be sent to business.finance@bis.gsi.gov.uk by Friday 27 January 2012.
Improving access to non-bank debt: call for evidence (PDF, 121 Kb)
Business Secretary Vince Cable said:
"Businesses across the UK are still in many cases unhappy with the way they have been treated by banks.
"We have secured a rise in new lending from the biggest banks this year and credit easing is designed to provide another immediate boost. But I want to see as much competition in the market as possible and for businesses to have access to a wide range of finance sources.
"There are exciting innovations emerging that provide alternatives to bank lending. Businesses are selling bonds directly to their customers, missing out the middle-men. And peer-to-peer lending has opened up opportunities for savers to invest directly in the fortunes of UK businesses. I want to investigate and dismantle any barriers to these and future innovations.
"Tim Breedon is a highly capable and well-respected figure in finance and I look forward to working with him in the coming months as he takes forward this important work."
