
The Global Financial Crisis?
According to the research, that dark period between 2007-2008 lingers on and continues to rain on the parade of British SMEs. Moreover, the increasingly weak leadership of Theresa May, coupled with ever-tightening financial regulation is affecting businesses at the start of their growth journey, namely, SMEs. Since the crisis, the Tory government has been in power, and under Theresa May it looks like their agenda of strict financial regulation continues. ?? So what does this mean for SMEs seeking finance?Banks are bound by regulation?
To stem the social and economic repercussions of the financial crisis, governments subjected banks to increasingly strict regulatory measures.? Whilst there was an idea that this move could rescue the sullied reputation of big banks, these measures have crippled SMEs and their chances of gaining easy access to bank-based funding. Factors such as?low-interest rates and low margins have made banks less likely to want to offer finance to smaller businesses. In such a heavily regulated climate, and following the drama of the financial crisis, such?endeavours are seen to be too?much of a high-risk option.?Coupled with the clampdown on financial institutions, there has been a ?perfect storm? for SMEs who have been starved of the funding they need to trade and grow.”?? Dr. Rebecca HardingProviding trade finance for SMEs is now seen as a costly ordeal for banks because of the relatively high liquidity and compliance costs entailed. It appears that banks are so paranoid about losing their global reputation again, they won’t even attempt to lend their vast resources to support an SME trade finance market that is worth an estimated $1.5bn globally, according to Coriolis.?
Big businesses can navigate these regulations better
Whilst banks are subjected to increasingly strict sanctions and tariffs through the supply chains of their clients, bigger companies, such as corporates, can better negotiate these stumbling blocks by moving their supply chains around.?This tit for tat approach to the imposition of sanctions and trade tariffs has served to further stifle small business growth.”?However, SMEs do not have the financial facilities to do this at the level of their corporate cousins. These additional regulatory hurdles make extra work for SMEs, who are already struggling to access mainstream forms of finance, such as funds from banks. Where does this leave SMEs?

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