It appears my optimism for the public purse’s support of Private Business has taken a bit of a kicking.What started as a good idea that would help private businesses grow their way out of the downturn has had the common sense beaten out of it by the public sector and political meddling. Finding a way to make sure that private businesses can access lending should be simple, but it’s turned into a continual recipe for disaster with “anti-business secretary”, Vince Cable handling the situation no better than a trainee chef in Gordon Ramsey’s kitchen. A couple of months ago I thought we’d seen the light at the end of the tunnel when the chancellor announced the introduction of a state-backed bank. This is something I’ve been pushing for years, pretty much since the banks’ response to their own irresponsible gambling was to stop lending to small businesses; followed by an attempt to imply that it was us who pulled down their house of cards. Apparently, lending to small businesses is too high a risk. A real case of 2+2=7 logic, if ever I heard one, and from the guys who are supposed to be good at judging risk… But credit where credit is due (forgive the bad pun), it seems there will be a business bank. Unfortunately, the details are still a bit sketchy and the opening hours are completely rubbish – mostly because they don’t even start until 2014. The details we do have about it are frustrating, to say the least. Within hours of Osborne’s announcement, Cable claimed the idea as his own and watered it down to little more than another QUANGO in his ramshackle empire, which amounts to an agency to help businesses better negotiate their way around all the failed schemes that have come before. So what do we do in the meantime? Well, Vince Cable has mastered the political art of the re-announcement to “unveil” £110m funding for small businesses. He reintroduced match-funding in the form of the Business Finance Partnership, where government puts up some money and the private sector matches it with the idea being that the money is loaned directly to SMEs. Sounds simple and, as we say at Pimlico Plumbers, “job done”. Or so you might think. It seems things are not so straightforward. For some reasons that only those in Whitehall know, there’s a middleman in this scheme. But why do we need a middleman? Go figure! All I know is there are these firms called “peer-to-peer lenders”, who get the money, and it’s their job to hand it out to the “deserving” – Zopa (£10m); BOOST&Co (£20m); Funding Circle (£20m), and Credit Asset Management Limited (£5m). I don’t know much about these companies, except I’m pretty sure they’re not social agencies staffed by volunteers, and it’s hard to see how they will streamline the efficient lending of much needed cash to small and medium sized businesses. In fact, it looks like the birth of a new industry to me. Charlie Mullins is founder and CEO of Pimlico Plumbers.
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