One thing that helps to make me less grumpy is to witness the growing debate on how best to persuade others to take a financial interest in your business. There have been lots of ideas and developments this year, so let’s sort the wheat from the chaff.
Politicians continue to demand our high street banks lend more to SMEs. Apart from feeding a few column inches for lazy journalists, that's is a waste of everyone’s time. Back in the days when they had lots of money to lend, bankers were much more attuned to fuelling property development in London, than casting companies in the Midlands or high-techs in Cambridge. Even if they had funds now - which they don’t - it will take a generation to change their systems and psyche. Forget it.
What about crowdfunding? I really like this one but as Barry James has pointed out elsewhere, to limit this to FSA approved/defined “sophisticated investors” is stifling. We are never going to get the FSA to drop its ingrained hatred of SME investing, but I would suggest the government could at least muzzle them by legislating that any UK or EU citizen is free to invest up to £1,000 in a company. But if you want to do more than that, you'll have to go the sophisticated investor certification route. This is easy to administer, keeps the FSA away from meddling in small sums of money, and should really open up this funding route to our small companies.
Vince Cable’s Business Bank. At the moment, this is just planned to be an agglomeration of government schemes under one roof, but it could be so much more. Apologies here to NESTA for partly stealing their idea from their The case for innovation led growth report. NESTA suggest that the government’s upcoming circa £4bn windfall from selling 4G mobile licences should be used to create a bank dedicated to fund high-techs. I think it would make more sense, politically, to use it to fund the Business Bank, because then we could recreate the highly successful Industrial and Commercial Finance Corporation (ICFC), which was set up in 1945 to provide capital to small and medium-sized companies.
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